Home buyers flee the housing market as mortgage rates surge to the highest level since 2000

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Mortgage applications fell 4.2% in the latest week, the Mortgage Bankers Association said. The average rate for a 30-year mortgage is 7.31%.

The numbers: Mortgage rates rose for the fourth week in a row to the highest level since 2000, as the economy continues to show strength.

Demand for both purchases and refinancing fell. That overall pushed down the market composite index, a measure of mortgage application volume, the Mortgage Bankers Association said on Wednesday. The average contract rate for the 30-year mortgage for homes sold for $726,200 or less was 7.31% for the week ending August 18. That’s up from 7.16% the week before, the M.B.A. said. The 30-year is at the highest level since December 2000.

The big picture: The housing market continues to be hammered by good economic news, which is pushing rates up and depressing home sales. Higher rates also discourage homeowners from selling, as their purchasing power erodes when they look for homes to buy.

 

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