Mortgage demand rose for the third time in the last four weeks but home prices and seasonal impacts are keeping demand depressed despite rate drops, according to the latest data from the Mortgage Bankers Association’s weekly survey.
Total mortgage demand increased by 0.5% for the week ending August 23, a notable improvement from the 10% drop in the prior week.
- Purchase demand rose 0.9% week-over-week but remains near its lowest levels this year.
- Refinance (refi) demand fell 0.6%, marking the second consecutive weekly decline after a spike three weeks ago. Despite this, refi demand remains near a 27-month high.
8 Straight Weeks: Mortgage rates dropped for the eighth consecutive week, with a six basis point decline, bringing the 30-year fixed rate to 6.44%, the lowest level since April 2023. Rates have now fallen by almost 60 basis points over the past eight weeks.
What’s happening: The continued drop in mortgage rates offers some relief, but the overall demand remains weak. High home prices are squeezing buyers, overshadowing the potential savings from lower rates. Families might be delaying home purchases as they focus on end-of-summer activities and the start of the school year.
What to watch: If demand continues to lag despite falling rates, the affordability crunch could deepen, signaling a more lasting shift in the housing market.
