Mortgage demand pulled back last week, dropping by 10% following a significant 17% surge the previous week, according to the latest data from the Mortgage Bankers Association (MBA).
- Despite the decline, overall mortgage demand remains robust, holding at the second-highest level in 18 months.
Refis: The drop in mortgage activity was largely driven by a decrease in refinance applications, which fell by 15% after an extraordinary 34% jump the week before. Even with this pullback, refinance demand is still at its second-highest level in 27 months.
- The refinance share of mortgage activity decreased, accounting for 46.3% of total applications, down from 48.6% the previous week.
Purchase demand also remains sluggish, falling 5% from the previous week. It is now just 2% above February’s low for the year, indicating ongoing challenges in the homebuying market. The adjustable-rate mortgage (ARM) share of activity also decreased, now representing 5.5% of total applications.
What They’re Saying: Joel Kan, MBA’s Deputy Chief Economist, provided some context, stating, “The level of refinance applications remains 23 percent higher than a month ago, and the past two weeks have seen the strongest weekly readings since 2022, as borrowers have sought lower rates. FHA refinance applications bucked the trend and increased for the sixth straight week.”
While the mortgage market experienced a slight pullback, the underlying demand remains relatively strong, especially in the refinance sector, where borrowers continue to capitalize on lower rates. However, the persistent weakness in purchase demand underscores the challenges that potential homebuyers face in the current market environment.
