Mortgage demand declined last week, this was the first drop in the last three weeks as high interest rates continued to weigh on borrowers. The Mortgage Bankers Association (MBA) reported a 2.0% drop in its total mortgage application index, which fell to 220.
- Purchase applications remained largely unchanged, slipping slightly to 162.4, marking the third straight week within a narrow range.
- Refinance demand dropped 6.8% to 520.9, its third consecutive weekly decline. Mortgage rates held steady at 7.02% for the second straight week.
What They’re Saying: “Demand fell as rates remain elevated,” said Joel Kan, MBA’s Deputy Chief Economist. However, he highlighted a 2% increase in FHA purchase applications as a bright spot, suggesting some momentum in the entry-level housing market.
- Despite the dip, Kan pointed to strong year-end sales of both new and existing homes. If mortgage rates stabilize and housing inventory improves, he expects a gradual rebound in purchase activity in the months ahead.
Bottom Line: With rates and home prices continuing to remain high mortgage demand will continue to remained depressed.
