Mortgage demand falls as interest rates rise and first-time buyers retreat.

The Mortgage Bankers Association's index of mortgage applications fell 8.8% last week due to higher mortgage rates, which also caused a 6% drop in demand for refinancing. The interest rate-sensitive housing market has cooled rapidly in the wake of the Federal Reserve's aggressive tightening campaign, and policymakers have signaled a 10th increase in the benchmark federal funds rate at their May meeting. Limited inventory has also bolstered demand and prices this month, with the number of available homes on the market in March down more than 50% from the typical amount before the pandemic began.