A “great slowdown” is happening in the U.S. housing market, a new report from Bank of America says, as mortgage originations shrink and spending on household items softens.
Amid weak home sales numbers, builder confidence, and new construction, there’s a lot of chatter about whether the housing sector is in a recession.
New data from Bank of America adds more gloom via two data points.
Residential mortgage originations fell by 29% during the second quarter compared to last year, down to $14.5 billion, according to internal data from Bank of America BAC, +1.47% customers, the Bank of America Institute found.
That’s because borrowing costs are much higher now compared to a year ago, thanks in part to the Fed’s rate hikes. Since January, the average rate on a 30-year mortgage has increased by more than 200 basis points, according to the report, “reaching the highest level since 2008.”
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