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Interest Rates Have Stalled — Is the Housing Market Slowing Down, Too?

Cynthia Measom
·1 min read
Meeting with financial advisor.
Meeting with financial advisor.

After reports of great housing prices for home buyers in the pandemic, a mortgage rate stall this month has caused borrowers to pull back a bit. Even though mortgage rates are approaching historic lows, borrowers are choosing to find ways to lower their mortgage payments — especially by refinancing, causing demand to fall 4% over the last week, according to a report on the Mortgage Bankers Association Index by CNBC.

Although the volume of home refinance applications registered 30% higher than a year ago, that annual comparison has been shrinking over the past few months. Mortgage applications fell 1% last week — though compared to last year, they’re up 6%. That annual comparison is the smallest since mid-May, falling from gains in the 20% range over the past few weeks, according to the CNBC report.

“It’s not that they [lenders] don’t want to drop rates. It’s that they don’t have the capacity to fulfill that mortgage request right now, on the refis [refinance applications] especially,” Jeff Taylor, managing partner at Digital Risk, a Florida-based financial mortgage analytics company, told Yahoo Finance’s The Final Round. Once lenders catch up, mortgage rates are likely to decline again.

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This article originally appeared on GOBankingRates.com: Interest Rates Have Stalled — Is the Housing Market Slowing Down, Too?