Mortgage demand fell last week even as rates hit a 5-month low, according to the weekly survey from the Mortgage Bankers Association.
- Total mortgage demand fell to an index of 209.3 for the week ending July 19th, marking a 2.2% decline from the previous week.
A Tale of Two Markets: Purchase demand continues to put downward pressure on overall demand despite refinance demand continuing to remain at two-year hights.
- The primary driver of the decline was a significant drop in purchase demand, which fell to a 7-week low after a 4% decrease from the previous week. This trend suggests that potential homebuyers are still hesitant, possibly due to economic uncertainties or affordability concerns.
- In contrast, refinance demand continues to show resilience. The refinance index rose slightly to 614.9, the highest level since August 2022.
Rates Continue To Fall: The 30-year fixed-rate mortgage averaged 6.82% for the week ending July 19th, down 5 basis points from the prior week. This marks the lowest rate since early February. Despite the falling rates, the expected boost in purchase demand has yet to materialize, underscoring the cautious sentiment among homebuyers.