Demand for mortgages drops to a 25-year low
Given the recent rise in mortgage rates, higher home prices, and fewer homes on the market, it’s not a wonder that mortgage demand is low, but the Mortgage Bankers Association confirmed it. Demand for mortgages is at its lowest level since 1997. Homebuyer’s demand for mortgages was down 4% for the week and was down 38% compared to a year ago.
Also, mortgage refinances are 86% lower than the same week a year ago.
The housing market struggled in September
September is normally part of peak season for the housing market, but CNBC reported that this past September was one of the slowest we’ve seen with housing starts and permits coming in lower than their forecasted numbers. It was expected that housing starts would be down 6.7% in September, but it came in at 8.1%. Building permits were expected to be up 1.5% in September, but only came in at 1.4%.
Does the Federal Government have a plan to boost affordable housing?
An op-ed appeared on Yahoo! Finance from Janet Yellen, the secretary of the treasury and Marcia Fudge, the secretary of Housing & Urban Development. In the detailed article, Yellen and Fudge detailed how single-family homes have been underinvested in for a long time, and they’ve been working to allow funds from the American Recovery Plan to support home construction. They’ve already paved the way to help complete a 278-unit complex in Wilmington, NC that was stalled due to the pandemic. Several other projects are also said to be in the pipeline.
If the government wants to support home construction, enable families to get into affordable housing, and enable borrowers to get the help they need, this could really help a housing market that needs the support.
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