10 August 2023
Mortgage applications to purchase a home: -40% from 2022 and 2019, 3rd worst week since 1995, behind only two weeks in February. Mortgage rates have surged over 7%, the highest since 2002, leading to a significant drop in home sales. This spike in rates was influenced by the Treasury’s announcement to issue long-term notes and bonds to fund government deficits, coupled with Fitch’s downgrade of the US credit rating from ‘AAA’ to ‘AA+’. As a result, mortgage applications for home purchases have seen drastic declines compared to previous years. Additionally, there has been a significant drop in refinance applications, severely affecting mortgage lenders and brokers. Despite these conditions, some homeowners are still opting for cash-out refinances either in anticipation of a rate drop or out of immediate necessity.