Mortgage rates at a 4-year high could be weighing on America’s housing market.
Mortgage applications dropped last week for the fourth time since mid-March, down 0.2 percent, as the average 30-year fixed loan rate rose to 4.73 percent, according to the Mortgage Bankers Association.
The trend raises the prospect of more buyers being squeezed out of the property market amid rising prices and the limited number of listings.
“We’re going to have to continue this back and forth because the question is going to be throughout the year whether or not and at what level are rates too high for the economy,” Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co., said in an interview at Bloomberg’s New York headquarters.
In March, first-time buyers made up 30 percent of existing home sales, down from 32 percent a year earlier, according to data from the National Association of Realtors released April 23, while the median sales price topped $250,000.
“Deteriorating home affordability could hurt demand by making it more difficult for first-time home buyers to enter the market,” Lewis Alexander, chief economist at Nomura Securities International, wrote in his daily commentary for April 24.
— With assistance by Sarah Ponczek