The housing market, still in a relentless phase as mortgage rates continue to rise, is keeping buyers from making a move.

What happened: Mortgage applications to buy a home fell 6% last week from the previous week, falling for the third straight week, according to the Association of Mortgage Banks.

Mortgage application volume was 44% lower than the same week a year ago, marking a 28-year low.

In addition, the average contract rate for 30-year fixed-rate mortgages with matching loan balances has increased from 6.62% to 6.71%, with points increasing from 0.75 to 0.77 for loans with 20% down payments.

Also read: Berkshire Hathaway is banking on a strong real estate recovery

The high-yield environment has already forced some companies to lay off employees. Online Loan Marketplace LendingTree Inc TREE around 200 employees laid offwhile JPMorgan Chase & Co JPM And Wells Fargo & Co WFC also laid off employees. Wells Fargo cut 500 mortgage bankers last week, and Rocket Companies Inc RKT also carried out layoffs.

The impact of the housing market slowdown is also showing in the earnings of companies such as Lowes Companies Inc LOW.

Over the past year, Lowe’s has seen strong sales growth as the housing market has remained resilient. However, as the market cooled in the second half of 2022, so did the Street’s expectations for Lowe’s.

Lowes on Wednesday reported fiscal fourth-quarter sales that fell short of consensus estimates and gave a conservative outlook for 2023, suggesting homeowners aren’t renovating and new buyers aren’t entering the market.

Chairman of the Federal Reserve Jerome Powell warned late last year that the housing market was likely to undergo a “difficult correction” – from rising interest rates – before reaching “better equilibrium”.

These prospective home buyers need to see a correction in mortgage rates, an increase in supply and a general decline in home prices for a better balance.

Read…