(NewsNation) — Mortgage applications fell to their lowest level in nearly three decades last week as interest rates continue to surge.
Total application volume is now at its lowest point since 1995, dropping 6.9% from the week prior, according to the Mortgage Bankers Association’s (MBA) seasonally adjusted index.
The key measure of home-purchase applications fell as the 30-year fixed mortgage rate increased for the sixth consecutive week to 7.7%, the MBA said.
Mortgage rates are now at their highest level since November 2000, causing many homeowners to stay put.
“Purchase applications were 21% lower than the same week last year, as homebuying activity continues to pull back given reduced purchasing power from higher rates and the ongoing lack of available inventory,” Joel Kan, MBA’s vice president and deputy chief economist, wrote in a statement.
As to whether lower mortgage rates could be coming in the near future, experts say it could take a while.
“We’re going to be in this 7 to 8, maybe 9% range for the foreseeable future, for a year,” Erin Sykes, chief economist for Nest Seekers International, told NewsNation. “I don’t think that we will be here forever.”
To afford a median-priced U.S. home now, Redfin says buyers must earn $114,627. That’s up 15% ($15,285) from a year ago and up more than 50% since the pandemic.
In places like San Francisco, where the median home sale price is $1.48 million, you’ll need more than $400,000 in annual income.
In September, sales of previously occupied U.S. homes fell for the fourth month in a row, grinding to their slowest pace in over a decade.