The variety of residential mortgages originated within the fourth quarter tumbled to a nine-year low as inflation drove home-loan charges above 7%, based on 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 actual 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, based on information from the Bureau of Labor Statistics.

The typical U.S. price for a 30-year fastened 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, based on Freddie Mac. The speed final week was 6.5%, the mortgage securitizer mentioned.

“Charges have settled again down a bit thus far this yr, going backwards and forwards in small quantities,” mentioned Barber. “That would lure some potential dwelling consumers again into the market.”

The annual common U.S. price for a 30-year fastened dwelling mortgage in all probability will fall to five.3% this yr from 6.6% in 2022, the Mortgage Bankers Affiliation mentioned in a Feb. 21 forecast. Inflation possible 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 possible 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 will probably be a tricky 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.