Mortgage Demand Stalls After Refinance Surge
- A modest increase in overall mortgage applications masks a continued struggle for refinance activity, even as interest rates hit a multi-year low. The latest data from the Mortgage...
- Mortgage application volume increased slightly last week, but the gains were limited.
- Total mortgage application volume rose 0.6% on a seasonally adjusted basis for the week ending May 31, 2024, according to the Mortgage Bankers Association (MBA).
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Mortgage Demand Stalls Despite Falling Rates, MBA Data Shows
Table of Contents
A modest increase in overall mortgage applications masks a continued struggle for refinance activity, even as interest rates hit a multi-year low. The latest data from the Mortgage Bankers Association reveals a complex landscape for homebuyers and homeowners.
Key Takeaways
Mortgage application volume increased slightly last week, but the gains were limited. Refinance demand, after a meaningful jump the prior week, largely stalled. Interest rates for 30-year fixed mortgages fell to their lowest level as September 2024, but experienced volatility following the Federal Reserve’s rate decision.
MBA Data: A Mixed Bag
Total mortgage application volume rose 0.6% on a seasonally adjusted basis for the week ending May 31, 2024, according to the Mortgage Bankers Association (MBA). MBA Weekly Mortgage Applications Survey. This increase follows a substantial 58% surge in refinance demand the previous week, as reported by the MBA.MBA Weekly Mortgage Applications Survey.
Though, the overall picture is nuanced. While purchase applications saw a modest increase, refinance applications failed to maintain their previous momentum.
| Index | Current (May 31, 2024) | Previous Week | Change |
|---|---|---|---|
| Composite Index | 204.9 | 203.7 | +0.6% |
| Purchase Index | 196.4 | 195.1 | +0.7% |
| Refinance Index | 214.4 | 213.1 | +0.6% |
Interest Rate Volatility
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.34% from 6.39% during the week, with points increasing to 0.57 from 0.54,including the origination fee,for loans with a 20% down payment.