Mortgage Applications Continue to Decline
Applications Fall for Third Consecutive Week
Rates Remain Low, But Demand Declines
Mortgage application volume dropped 39 during the week ended July 26, according to the Mortgage Bankers Association (MBA). This marks the third consecutive week of declines and the lowest level of applications since 1994. The decline was driven by a decrease in both refinance and purchase applications.
Refinance applications, which are typically driven by interest rate changes, fell 46% from the previous week and are now at their lowest level since 2016. Purchase applications, which are driven by demand for housing, fell 28% from the previous week and are now at their lowest level since 2014.
The decline in applications comes as mortgage rates remain low. The 30-year fixed-rate mortgage remained below 7% for the second consecutive week, averaging 6.95%. However, rates are still significantly higher than they were a year ago, when the average rate was 2.86%.
The combination of higher rates and economic uncertainty is weighing on demand for mortgages. Many potential homebuyers are hesitant to purchase a home at a time when they are facing higher monthly payments and job losses.
The decline in applications is likely to continue in the coming weeks as rates remain elevated and economic uncertainty persists. This is likely to lead to a further slowdown in the housing market.
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