Mortgage demand surged to its highest level in nearly six months, driven by a significant increase in refinancing activity, according to the Mortgage Bankers Association’s (MBA) latest weekly survey. The total mortgage demand jumped 4.0%, reaching levels not seen since January 19th.
- Refinancing Boom: The rise in mortgage demand was entirely due to a surge in refinancing applications, which spiked by 15.4%. This surge propelled refi demand to its highest point since August 12th, 2022.
- Purchase Demand Decline: In contrast, purchase demand fell by 2.7%, marking its lowest level since the end of May. This decline suggests that despite lower rates, potential homebuyers are still cautious.
Rate Impact: The increase in refinancing activity is largely attributed to the drop in the 30-year fixed mortgage rates, which averaged 6.87% for the week ending July 12th. This is a 13 basis point decrease from the previous week and the lowest rate recorded since March 8th. The lower rates have provided a strong incentive for homeowners to refinance their existing mortgages.
The MBA’s survey highlights a dynamic mortgage market, with refinancing activity responding swiftly to changes in interest rates. The decline in purchase demand signals some hesitation among new buyers, as home prices remain elevated and inventory, although higher this year, still remains historically depressed.