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Mortgage rates continue to retreat from 2023 highs, but homebuyer demand for purchase loans remained flat last week, as for-sale inventories are still tight in many markets and prices remain out of reach of some would-be buyers.
Demand for purchase mortgages was down 0.3 percent last week from the week before, after seasonal adjustments, the Mortgage Bankers Association (MBA) reported Wednesday. The MBA’s Weekly Mortgage Applications Survey found purchase loan demand was down 17 percent from a year ago.
With mortgage rates back to levels not seen since August, refinancing is starting to make sense for some homeowners again, driving refi requests up 14 percent last week compared to the week before, and 10 percent from a year ago.
Joel Kan
“Refinance applications saw the strongest week in two months, increasing on a year-over-year basis for the second consecutive week for the first time since late 2021,” MBA Deputy Chief Economist Joel Kan said, in a statement. “The overall level of refinance applications is still very low, but recent increases could signal that 2023 was the low point in this cycle for refinance activity, consistent with our originations forecast.”
The MBA lender survey showed mortgage rates declined last week to the lowest level since August 2023.
Mortgage rates continue retreat from peaks
Borrowing costs have continued to slide, with rates on 30-year fixed-rate loans falling below 7 percent this week for the first time since Aug. 10, according to daily rate lock data tracked by Optimal Blue. At 6.99 percent Tuesday, rates on 30-year fixed-rate loans have come down 84 basis points from a 2023 peak of 7.83 percent registered on Oct. 25.
Rates keep falling as fresh inflation data pours…