Mortgage demand has reached its lowest point in three months as home prices remain elevated, rates are rising and economic uncertainty continues ahead of presidential election, according to the latest weekly survey from the Mortgage Bankers Association (MBA).
- For the week ending October 18, the mortgage demand index dropped to 214.8, marking a 6.7% decrease from the previous week.
- This represents the fourth consecutive week of declining demand, bringing the index to its lowest level since July.
Across The Board: The decline is widespread, affecting both refinancing and purchase applications. Refinance demand fell by 8.4% compared to the prior week, hitting its lowest point since August. Similarly, purchase applications decreased by 5.1%, also reaching their lowest levels since August.
Rising Rates: The recent slide in demand comes against the backdrop of rising interest rates and persistently high home prices, which continue to weigh on the market. After nearly three months of declining mortgage rates, the past month has seen a sharp reversal.
- Rates have jumped nearly 40 basis points in the last three weeks alone. For the week ending October 18, the 30-year fixed-rate mortgage held steady at 6.52%, unchanged from the prior week.
Bottom Line: Elevated mortgage rates, combined with high home prices and economic uncertainty, have led to a sustained drop in mortgage demand. With rates still high and the housing market facing headwinds, a rebound in demand seems unlikely in the near term.
