Mortgage rates hit the highest level in a month, causing lower income homebuyers to drop out

Mortgage rates rose last week, causing loan demand to decline and pushing the average loan size higher as lower-income borrowers dropped out. The data point to weaker affordability and softer mortgage activity, a modest headwind for the housing market. Impact is likely limited to housing-related names and rate-sensitive markets rather than the broader market.

Analysis

Mortgage rates rose last week, causing loan demand to decline and pushing the average loan size higher as lower-income borrowers dropped out. The data point to weaker affordability and softer mortgage activity, a modest headwind for the housing market. Impact is likely limited to housing-related names and rate-sensitive markets rather than the broader market.