Mortgage demand falls to lowest level since 1995 as rates surge

FOX Business correspondent Madison Alworth shares why for many first-time homebuyers, the American dream is delayed as a result of high mortgage rates and home prices on 'Varney and Co.'

A key measure of home-purchase applications tumbled last week to a nearly three-decade low as consumer demand cooled sharply amid a recent surge in mortgage rates.fell 4.2% last week to the lowest level since 1995, according to new data published Wednesday. The data also showed that the average rate on the popular 30-year loan climbed to 7.31% from 7.16% the previous week, the highest level since December 2000. By comparison, just one year ago, rates hovered around 5.65%.

"Treasury yields continued to spike last week as markets grappled with illiquidity and concerns that the resilient economy will keep inflation stubbornly high," said Joel Kan, MBA's deputy chief economist.The steeper rates weighed heavily on housing demand, with applications for a mortgage to purchase a home tumbling 5% for the week. Application volume is down 30% compared with the same time last year.

Demand for refinancing also continued to fall last week, sliding another 3%, according to the survey. Compared with the same time last year, refinance applications are down 35%.

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