Fewer Americans are purchasing homes and the ones who are buying are acquiring more affordable homes as consumers are greatly affected by the worsening inflation. Mortgage demand fell last week compared with the previous week, and the average loan size shrank as well.
According to the Mortgage Bankers Association’s (MBA) seasonally adjusted index, mortgage applications to buy a home went down four percent for the week and were 18 percent lower than the same week in 2021. The report also included an adjustment for the July Fourth holiday.
House hunters may have been hesitating to purchase due to higher mortgage rates. However, the report noted that the rates held steady last week.
The average contract interest rate for 30-year fixed mortgages with conforming loan balances ($647,200 or less) remained at 5.74 percent, with points decreasing to 0.59 from 0.65 (including the origination fee) for loans with a 20 percent down payment.
“Purchase applications for both conventional and government loans continue to be weaker due to the combination of much higher mortgage rates and the worsening economic outlook,” MBA economist Joel Kan said.
He added that after reaching a record $460,000 in March 2022, the average purchase loan size was $415,000 last week, pulled lower by the potential moderation of home-price growth and weaker purchase activity at the upper end of the market.
Due to higher interest rates, applications to refinance a home loan have been notably weaker. It raised two percent for the week but was 80 percent lower than the same week a year ago. At the same time last year, the average mortgage rate was 3.09 percent.
Realtor.com chief economist Danielle Hale said homebuyers shouldn’t expect mortgage rates to fall back to three percent any time soon.
“The Federal Reserve is trying to fend off inflation by raising interest rates and that move will keep mortgage rates high for the foreseeable future,” she said.
Consumers have faced a difficult market this year as home prices have been in the $500,000 range, mortgage rates are soaring and there has been stiff competition from high-income buyers. (Related: The Fed is destroying the home mortgage industry as rate hikes due to ‘Bidenflation’ lead to a 70 percent reduction in lending.)
Homeownership now a distant dream for most Americans
The ever-skyrocketing cost of house purchase has pushed middle-income Americans’ homeownership dream aside. Most of them stopped shopping and resorted to renting.
“The market is getting much more challenging for home shoppers – we’re seeing some of them just quit and put their plans on hold,” Hale said.
Aside from the skyrocketing mortgage price, another factor that may have contributed to this is the availability of houses for sale for middle-class citizens.
A recent analysis by the National Association of Realtors found that across America, about 250,000 houses are currently for sale that is considered affordable for households with between $75,000 and $100,000 in annual income. This is a marked decline from about 656,000 available homes before the Wuhan coronavirus (COVID-19) pandemic started.
Also, it is no longer enough for a buyer to have a ready down payment and a pre-approved mortgage. Redfin, a reputable real estate firm, said about 30 percent of homes were bought with all-cash offers in 2021, up from about 25 percent in 2020. In cities such as West Palm Beach and Naples, more than 50 percent of purchases were all-cash deals.
Analysts also say that home ownership in the U.S “is a signifier of the upper class now.”
“Unfortunately, the middle-class dream of home ownership has been fading away,” said Redfin chief economist Daryl Fairweather.
Rubeela Farooqi, the chief economist at High-Frequency Economics, said in a report that the prices remain excessively high and are impacting affordability.
The significant impact of the pandemic has also reduced affordable housing options and the total supply of single-family homes. This means that renting is becoming a more favorable option for many people, National Rental Home Council said.
Watch the below video that talks about soaring mortgage rates that cut mortgage demand to less than half compared to last year.
This video is from the SecureLife channel on Brighteon.com.
More related stories:
- 30-year fixed mortgages surge above 6% for the first time since 2008 as market reacts to Fed rate hikes.
- Housing bubble about to burst? Mortgage applications crash to 22-year low as monthly payments skyrocket.
- Average monthly apartment rent surges to all-time high $2,000, real estate firm reveals.
- Average rent prices in the US surpass $2,000 amid inflation and rising mortgage interest rates.
Sources include:
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
