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Mortgage demand in U.S. declines slightly, even with lower interest rates

Mortgage applications declined slightly last week even though interest rates for home loans were also down, the MBA report said Wednesday. File Photo by Alexis C. Glenn/UPI | <a href="/News_Photos/lp/d049ceac4d69a81d0d28973a61aff9c2/" target="_blank">License Photo</a>
Mortgage applications declined slightly last week even though interest rates for home loans were also down, the MBA report said Wednesday. File Photo by Alexis C. Glenn/UPI | License Photo

June 1 (UPI) -- Mortgage demand in the United States has declined to its lowest level in about four years, despite a corresponding decrease in interest rates, an industry report said on Wednesday.

The Mortgage Bankers Association said in its weekly report that mortgage applications were down 1% last week, and overall volume was down 14% compared to a year ago.

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The MBA said that applications to refinance also declined 5% from the previous week, and were down 75% year-to-year.

The decline in demand came after average interest rates dipped slightly last week from 5.46% to 5.33% for a 30-year fixed mortgage with a balance of up to $647,000.

MBA economist Joel Kan said, however, that business remained good for buyers seeking more expensive homes.

"Demand is high at the upper end of the market, and the supply and affordability challenges are not as detrimental to these borrowers as they are to first-time buyers," he said according to CNBC.

The declining demand, however, may help stem rising inflation in the United States -- which is at its highest mark in decades. Consumer spending is a key influencing factor in rising inflation and the Federal Reserve has recently hiked interest rates to control prices.

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