Mortgage Demand Falls – 3rd Week in a Row
- Despite a minor decrease in average rates, mortgage demand faltered last week, according to the Mortgage Bankers Association (MBA).
- The average interest rate for a 30-year fixed-rate mortgage, with a loan amount of $806,500 or less, decreased from 6.98% to 6.92%.
- Refinance applications, which are especially sensitive to weekly rate changes, decreased by 4% week-over-week, but are still up 42% compared to the same time last year.
Mortgage Demand Slips Despite Slight Dip in Rates
Despite a minor decrease in average rates, mortgage demand faltered last week, according to the Mortgage Bankers Association (MBA). The total mortgage application volume saw a 3.9% drop,based on the MBA’s seasonally adjusted index.
The average interest rate for a 30-year fixed-rate mortgage, with a loan amount of $806,500 or less, decreased from 6.98% to 6.92%. Points also saw a slight decrease, falling from 0.67 to 0.66. These figures apply to loans with a 20% down payment. Mortgage rates, secondary_keyword_1, have remained relatively stable over the past couple of months.
Refinance applications, which are especially sensitive to weekly rate changes, decreased by 4% week-over-week, but are still up 42% compared to the same time last year. While rates were only 15 basis points higher last year, the already low application volumes make even small fluctuations significant.
“Refinance activity fell across both conventional and government segment and the overall average refinance loan size was the smallest as July 2024,as potential borrowers hold out for larger rate drops,” said Joel Kan,an MBA economist.
Applications for mortgages to purchase homes also experienced a 4% decrease for the week. However, purchase applications are still 18% higher than they were a year ago.The spring home buying season has been slow, with closed sales remaining lower than last year, even with increased mortgage demand. The primary_keyword driving the increased purchase demand is a greater supply of homes on the market.Despite the highest inventory levels in five years, sales have not yet reached their full potential.
Mortgage rates, secondary_keyword_2, began this week with little movement. The upcoming monthly employment report could trigger the next significant shift in the market.
What’s next
The employment report’s release could significantly influence mortgage rates. Any unexpected changes could spur movement in either direction, impacting both purchase and refinance activity.