Mortgage Rates Are Falling, But Mortgage Demand Is Plummeting Too

If you've considered buying, selling, or refinancing a home, or even just slightly paid attention to the headlines, then undoubtedly the volatile market and correlating unprecedented numbers this year haven't escaped you. As of mid-November, mortgage rates had peaked at their highest levels in two decades, according to The Washington Post. With the Federal Reserve recently raising short-term interest rates to stem escalating inflation, mortgage rates followed suit (via Rocket Mortgage). Higher interest rates directly correspond to increased monthly payments, pricing people out of the market, making it more challenging for others to get a mortgage approval, and curtailing the volume of homeowners looking to refinance. In general, the demand for mortgages has plunged in tandem with rising rates.

However, since the posted high in November, interest rates for a 30-year fixed mortgage have fallen for the third consecutive week, per Trading Economics. "Though the Fed has not reached its targeted rate hike, mortgage rates continue to fall due to an expected recession and economic deterioration worldwide," said Les Parker of Transformational Mortgage Solutions via Bank Rate. Indeed, one could assume tumbling interest rates would equate to an influx of buyers who have been waiting for a more amenable purchasing environment, especially given the fact that home prices have finally started to come down. But so far, that hasn't been the case.