A one-two punch of rising prices and a shortage of homes is impacting demand for home mortgages.
Mortgage application requests fell 4% in the past week, according to the latest weekly survey from the Mortgage Bankers Association.
Even interest in purchasing finally cooled with the seasonally adjusted Purchase Index decreasing 3% from one week earlier.
"Mortgage applications decreased for the second week in a row, with the overall index reaching its lowest level since February 2020," said Joel Kan, MBA’s associate vice president of economic and industry forecasting. "Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity."
Refinancing also took a hit as that index fell 5% from a week ago.
"Refinance activity dropped for the second straight week, even as the 30-year fixed rate decreased slightly to 3.17 percent. Even though rates have been below 3.20 percent over the past month, they are still around 20-30 basis points higher than the record lows in late 2020," added Kan.
The survey covers more than 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.