• Mortgage

Mortgage Popularity Is Declining - Analysis And Reasons


Weeks ago Kickerdaily reported that the cost of the most common home loan in the U.S. went up again, giving homebuyers who are already facing the highest borrowing costs in 20 years another blow. That's because the mortgage popularity is declining and people is not asking for mortgages.

Mortage Popularity Is Declining

The typical 30-year fixed mortgage rate is now approaching the 7% barrier, more than doubling since the start of the year.

Significantly higher financing costs are driving purchasers off the market or to the sidelines, even as the increase in home prices slows down.

According to Lisa Sturtevant, an economist with Bright MLS in the mid-Atlantic region, "the mathematics just don't work for them anymore."

COPYRIGHT_MLCALC: Published on https://mlcalc.co/mortgage-popularity-is-declining/ by - on 2022-12-25T22:37:24.669Z

Even for purchasers who still qualify, "that 7% barrier is somewhat of a mental obstacle for buyers," she claims. "They might be waiting to see if rates would drop."

Even though many people who wanted to buy have given up, some have found a way to get around the higher prices.

Don't Forget This Fact About Mortgage

Can cash-stuffing help you pay off your debt? One TikToker used it to pay off $17,000 in credit card debt.

You're probably paying too much for your house insurance. How to save money on mental health

Put your spare change into investments to build a profitable portfolio.

30-year mortgages with fixed ratesAccording to mortgage juggernaut Freddie Mac, the average rate on a 30-year mortgage increased this week from 6.66% to 6.92%. The average rate at the same time last year was 3.05%.

Since April 2002, the 30-year rate hasn't been this high.

According to Sam Khater, chief economist at Freddie Mac, "we continue to see a tale of two economies in the data: strong job and wage growth is keeping consumers' balance sheets positive, while lingering inflation, recession fears, and housing affordability are driving down housing demand dramatically."

Without a doubt, the economy and property market will face challenges in the coming months.

Fixed-rate Mortgages For 15 Years

According to Freddie Mac, the typical rate for a 15-year mortgage increased from 5.90% to 6.09% this week.

The average 15-year rate at this time last year was 2.30%.

Compared to a few months ago, when many buyers were compelled to make offers well over the asking price and waive stipulations in order to get a house, buyers today face a different reality.

Sales have declined as a result of rising rates, which make properties less affordable. According to the most recent statistics from the National Association of Realtors, sales decreased in August for the seventh consecutive month and were 20% lower than they were a year ago.

Mortgage With A 5-year Adjustable Rate

This week, the average rate on a five-year ARM increased to 5.81% from 5.36% last week.

The five-year ARM's average rate at this time last year was 2.55%.

ARMs begin with a time frame of fixed interest rates, usually lasting between three and ten years. Generally speaking, the rates are lower than they would be for a fixed-rate loan, such as the more well-known 30-year mortgage.

The rate on an ARM, however, changes after the first period expires, either going up or down depending on a benchmark like the prime rate.

How much money must I earn to be in the top 1%, 5%, and 10% of Americans? It could be less than you anticipate.

The case for raising mortgage rates even furtherIn an effort to slow down the economy, the Federal Reserve has raised its interest rate five times this year. However, consumer prices have continued to rise at an uncomfortably fast rate.

That indicates that there will be further rate increases, and while mortgage rates are not directly impacted by changes in the Fed's rate, they are.

Officials from the Fed stated at its most recent meeting that maintaining an aggressive course of restrictive monetary policies was the only approach to fighting inflation.

The meeting's minutes, which were just released, say that "several participants stressed that the cost of doing too little to bring inflation down was likely higher than the cost of doing too much."

A More Affordable Alternative

Some buyers are trying to avoid the higher interest rates on loans by making their mortgage rate lock last less time.

A real estate agent in the Washington, D.C., area named Corey Burr says, "The popularity of adjustable-rate mortgages is growing very quickly because many borrowers think they will be able to refinance into a fixed-rate mortgage before their ARM adjusts."

He advises potential borrowers who are thinking about taking this path to look at adjustable-rate loans with starting periods of seven or ten years.

That will increase the likelihood that a refinancing opportunity will arise, according to Burr.

Luxury house in america
Luxury house in america

People Also Ask

What Is The Outlook For The Mortgage Industry?

According to gloomy predictions made by the Economy Forecast Agency (EFA), the 30-year fixed-rate mortgage will be around 7% in January 2023 and will exceed 11% in the fourth quarter of 2023. Fannie Mae thinks that the average 30-year mortgage rate will be between 6.2% and 6.6% for the whole year.

What Does Arm 3/5 Mean?

What this implies is that a 3/5 ARM is a loan where the initial interest rate is fixed for the first three years and then changes every five years for the remainder of the loan's term.

What Will Happen To Mortgage Industry In 2022?

We think that high mortgage rates will keep people from refinancing as much, so we expect originations to drop from $2.8 trillion in 2021 to $747 billion in 2022 and $310 billion in 2023.


A weekly survey by the Mortgage Bankers Association shows that mortgage activity has again gone down, even though rates have gone up.

Applications for both purchases and refinances decreased by 2% week over week.

Applications for refinances are down 86% from last year, while those for purchase loans are down 39%.

At 11.7%, says MBA's chief economist Mike Fratantoni, the number of applications for ARMs stayed "very strong."

Share: Twitter | Facebook | Linkedin

Recent Articles

  • Science Funding Methods - Mortgage, Loan, National Funds And More


    Science Funding Methods - Mortgage, Loan, National Funds And More

    Government funds (from the National Science Foundation, National Institutes of Health, etc.), firms that conduct research and development, and nonprofit organizations fund the majority of scientific research (e.g., the Breast Cancer Research Foundation, the David and Lucile Packard Foundation, etc.). Some societies and think tanks benefit from science funding methods.

  • Finance As Science And Art - Introduction To Finance


    Finance As Science And Art - Introduction To Finance

    Finance as science has deep roots in other scientific fields, such as mathematics and statistics, both as a corporate sector and as a discipline of study. Additionally, a lot of contemporary business theories align with mathematical or scientific concepts.

  • How To Ask For A Mortgage In Kenya


    How To Ask For A Mortgage In Kenya

    When you hear the word "mortgage," what comes to mind? If you are like the majority of people, you will agree that buying a property with a mortgage in Kenya nowadays is one of the most difficult tasks. To do that is expensive and annoying.

  • Can You Buy A Mansion With A Jumbo Mortgage?


    Can You Buy A Mansion With A Jumbo Mortgage?

    Cash might not be king anymore when it comes to purchasing luxury real estate. Investing in a multimillion-dollar home with cash means securing your liquid assets. A jumbo mortgage is somewhat different from a traditional fixed-rate loan when used to purchase a mansion than it is when used to finance a modestly priced property.

  • When Rich People Asked For A Mortgage To Build Millions


    When Rich People Asked For A Mortgage To Build Millions

    Even if you have the cash to pay cash for a property, getting a mortgage might be a wise financial decision that's why some rich people asked for a mortgage.

  • Benetifs From Loans With Jewelry As Collateral


    Benetifs From Loans With Jewelry As Collateral

    Because of the way they are set up, you can rapidly acquire the money you require without going through a drawn-out screening procedure or giving over valuable possessions. Loans with jewelry as collateral as collateral provide you with the best of both worlds.

  • Gambling Problems And Addiction


    Gambling Problems And Addiction

    Despite the obvious benefits of being close to a casino, proximity can lead to problem gambling.

  • Collections Software For Efficient Loan Collections


    Collections Software For Efficient Loan Collections

    Banks use collections software to manage their outstanding loans and to automate the collections process. This type of software typically includes a customer management system, a payment gateway, and an automated collections system.

  • Mortgage Calculator: Affordability Check Based On Salary, Second Mortgage, Pay Off Faster June 2022


    Mortgage Calculator: Affordability Check Based On Salary, Second Mortgage, Pay Off Faster June 2022

    When it comes to mortgages, you want to strike a balance between borrowing enough to cover your mortgage payments but not so much that they become an issue. Our mortgage affordability calculator may help you with that. Updated to June 2022.

  • How To Get a Mortgage in Spain in August 2021? Tips That You Must Know

  • How Much Is The Salary Of A Mortgage Underwriter In August 2021?

  • 5 Best Mortgage Lenders in 2021

  • Top 12 Mortgage Questions in August 2021

  • What its Like To Be a Mortgage Loan Officer in August 2021?