The variety of residential mortgages originated within the fourth quarter tumbled to a nine-year low as inflation drove home-loan charges above 7%, in line with a report on Thursday from ATTOM.

Individuals signed 1.5 million mortgages within the closing three months of 2022, together with buy loans and refinancings, down 55% from a yr earlier, as rates of interest greater than doubled, the true property information agency mentioned. Refinancings dropped to the bottom stage in additional than 20 years, the report mentioned.

“The lending trade skilled a triple-dose of hits within the fourth quarter of final yr as mortgage charges saved rising to ranges not seen in additional than 15 years and the U.S. housing market continued to stall after a decade of prosperity,” mentioned Rob Barber, ATTOM’s CEO.

Rates of interest soared within the fourth quarter after inflation sparked by the worldwide pandemic reached the most popular tempo for the reason that Nineteen Eighties, in line with information from the Bureau of Labor Statistics.

The typical U.S. charge for a 30-year mounted mortgage reached a 20-year excessive of seven.08% on the finish of October and once more in mid-November, in contrast with 2.98% a yr earlier, in line with Freddie Mac. The speed final week was 6.5%, the mortgage securitizer mentioned.

“Charges have settled again down a bit to this point this yr, going forwards and backwards in small quantities,” mentioned Barber. “That might lure some potential residence consumers again into the market.”

The annual common U.S. charge for a 30-year mounted residence mortgage most likely will fall to five.3% this yr from 6.6% in 2022, the Mortgage Bankers Affiliation mentioned in a Feb. 21 forecast. Inflation seemingly will sluggish to three.2% from final yr’s four-decade excessive of seven.1%, the commerce group mentioned.

Mortgage originations measured in greenback quantity fell to $2.25 trillion final yr, as measured by MBA, half the extent seen in 2021 when charges dipped beneath 3%. This yr, mortgage lending seemingly will decline to $1.87 trillion, the bottom stage since 2018’s $1.68 trillion, earlier than climbing to $2.28 trillion in 2024, MBA mentioned.

“Whereas we count on that 2023 can be a troublesome yr for the broader economic system in addition to the housing and mortgage markets, it ought to in the end convey decrease mortgage charges and a return of housing demand,” MBA economists mentioned in an announcement.