Mortgage demand has fallen to its lowest point in 27 years, according to the Mortgage Bankers Association (MBA). The number of applications submitted for home loans decreased by 4.8 percent in the week ending June 14, 2019. This marks the lowest level since 1991.
The sharp decline in mortgage demand came despite a drop in mortgage interest rates over the past few weeks. In addition, the share of refinance applications fell to its lowest level since April 2005.
Experts have speculated that the low mortgage demand is primarily driven by the fact that many potential homebuyers are unable to meet the necessary credit score or down payment requirements due to the prolonged economic downturn. The high cost of housing is also a factor, as rising property prices are making it difficult for some homebuyers to make a purchase.
At the same time, some have argued that the decline could also be attributed to the fact that potential buyers are feeling wary about the current economic conditions and their ability to make mortgage payments in the long-term.
The low mortgage demand has led to concerns that the current housing market may not recover in the near future. For now, all evidence indicates that mortgage demand is likely to remain low in the coming weeks.