This week, mortgage lenders reported that demand for home loans was at a three-year low.
Demand for home refinance loans fell to the lowest point since second quarter 2014, according to a survey by mortgage giant Fannie Mae.
With home loan rates in 2018 rising to the highest level in seven years, the fall off in the mortgage business shouldn’t be a surprise. The cost of financing a house is expected to continue increasing through the end of this year and in 2019.
Impacted companies, industry insiders say, are expected to respond by reducing workforce to reflect the new level of business activity.
“Lenders remain bearish this quarter as they continue to face headwinds from rising mortgage rates, tight supply, and strong home price appreciation, which have drastically reduced refinance activity and restrained home purchase affordability,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in the new report. “These factors have combined to squeeze mortgage origination volumes and have increased competitive pressures.