Below is a chart and excerpt from today's Early Look written by Director of Research Daryl Jones.
As we’ve discussed fairly frequently, the immediate term transmission mechanism for rate hikes is the U.S. housing market. We’ve seen this in spades over the last couple of months with 30-year mortgage rates now sniffing at 6.0% and near the highest levels since 2008. As a result, since the start of the year demand for houses has shriveled.
This week’s mortgage purchase applications declined sequentially for the 5th week in a row and on a monthly basis the index hit 198. To put in context, and shown in the Chart of the Day, this is a level that is just above the depths of the pandemic and down ~-36% since the start of the year. As far as Fed Operation Break Sh*t goes, that mission is being accomplished in the housing market.