Where Are the Buyers?

It seems that retro Halloween costumes from the 1990s aren’t the only thing dominating the seasonal news right now. The real estate market is also throwing it back to the 90s… but not in such a fun way. As mortgage interest rates sneak ever closer to 7% and people are still displaced from Hurricane Ian, mortgage applications have fallen to their lowest level in 25 years. 

To put it in numeric form, the Mortgage Bankers Association (MBA) keeps a constant finger on the pulse of the market composite index. In short, they measure mortgage application volume. This time last year, the index stood at 684.5. Now? That number is 218.7. 

What this reflects is that mortgage activity, which includes purchases and refinances, has dropped to its lowest number since 1997. 

What Does This Mean? 

The rise in mortgage rates might have spooked buyers, which feels only appropriate for October. It won’t last forever, though! With every percentage point rise, monthly mortgage payments increase which either prices buyers out of the market entirely or just makes them more judicious. They are taking this rise in rates as a cue to be more discerning and patient. 

While the overall national average of mortgage applications fell 14%, Florida itself fell over thirty percent. This is due almost exclusively to people who evacuated for Hurricane Ian and might still be displaced from the natural disaster. As people return to their homes, or where their homes used to be, that number should rebound as they find new places to live.

To read more statistics, visit Realtor.com.