Mortgage Demand Plummets as Interest Rates Reach 22-Year High

Mortgage demand dropped as interest rates matched a 22-year high, with total mortgage application volume 29% lower than the same week last year. The average contract interest rate for 30-year fixed-rate mortgages increased to 7.16%, the highest level since 2001. While mortgage demand from homebuyers remained flat, applications to refinance fell 2% and were 35% lower than last year. However, applications for mortgages to purchase newly built homes rose by 35.5% in July, with the Federal Housing Administration share hitting the highest level since May 2020, indicating more first-time buyers are turning to new homes due to limited inventory and affordability challenges.