Mortgage applications have dropped to the lowest levels in two years, Reuters reports.

What’s happening: Rising mortgage rates for potential homebuyers have seemed to scare off any new applications as total mortgage applications dropped 13.1% since December 2019, based on data from the Mortgage Bankers Association.

  • Applications for refinancing your mortgage dropped 15% weekly and 56% lower compared to one year ago, per CNBC.
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What they’re saying: “Higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, told CNBC.

Why it matters: Rising mortgage rates could make it challenging for new homebuyers to, well, buy a home. This will decrease the overall demand for new homes.

The bigger picture: As application numbers dwindled, mortgage rates are still going up.

  • The average size of a mortgage loan is about $453,000, according to Fox Business.
  • “The housing sector has seen rising loan balances as inventory for entry-level buyers remains tight,” Fox News reports.