The numbers: Home-shoppers hit the brakes on purchasing homes as mortgage rates rose in the latest week.

Demand for mortgages fell 8.8% in the latest week as rates rose for the first time in more than a month.

Demand fell for both purchases and refinancing. That pushed the market composite index—a measure of mortgage application volume—down, the Mortgage Bankers Association (MBA) said Wednesday.

The market index fell 8.8%, to 209.2, for the week ending April 14 from a week earlier. A year ago, the index stood at 374.

Key details: Refinancing, already in the doldrums, fell further. The refinance index fell 5.8% and is down 56% year to date.

Rate-sensitive would-be buyers pulled back sharply. The purchase index—which measures mortgage applications for the purchase of a home—fell 10% from the previous week.

Rates rose across the board.

The average contract rate for the 30-year mortgage for homes sold for $726,200 or less was 6.43% for the week ending April 14. That’s up from 6.3% the week before, the MBA said.

For homes sold for over $726,200, the average rate for the 30-year was 6.28%, up from 6.26% the previous week.

The 15-year rose to 5.89%, from the previous week’s 5.78%.

The rate for adjustable-rate mortgages rose to 5.56% from 5.51% previously.

The big picture: The housing market will likely feel the effects of rising mortgage rates strongly, as buyers—already frustrated with a shortage of for-sale listings–pull back on purchasing homes.

The MBA’s data indicated that first-time buyers in particular were holding back due to the rise in rates.

Many prospective sellers are delaying selling their homes because they’re unwilling to give up ultra-low mortgage rates they secured during the pandemic.

What the MBA said: “Affordability challenges persist and there is limited for-sale inventory in many markets across the country, so buyers remain selective on when they act,” Joel Kan, vice president and chief economist at the MBA, said.

Market reaction: The yield on the 10-year Treasury note was above 3.6% in early morning trading Wednesday.

The post Mortgage Demand Drops Sharply as 30-Year Mortgage Rate Rises appeared first on Real Estate News & Insights | realtor.com®.