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Fed says consumer mortgage demand slows due to rising interest rates

The US Federal Reserve said consumer mortgage demand slowed due to rising interest rates, according to its Beige Book that was released Wednesday.

“Deposit levels declined slightly, on balance, however a few banks did see an inflow of deposits following the failure of Silicon Valley Bank,” said the central bank’s Beige Book, which reports current economic conditions in each of the 12 federal districts in the US.

“Loan delinquencies continued to increase, albeit slightly and still not to pre-covid levels. Financial institutions expected moderate declines in loan and deposit levels for the remainder of the year,” it added.

The Mortgage Bankers Association announced earlier Wednesday that its Market Composite Index, a measure of mortgage loan application volume, fell 8.8% on a seasonally adjusted basis for the week ending April 14.

The 30-year fixed mortgage rate in the US, meanwhile, rose for the first time in six weeks to 6.43% last week, ending five consecutive weeks of decline.

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