The “For Sale” sign stands at a home in Miami, Florida on April 16, 2025.
Marco Bello | Reuters
As potential home buyers pull back, the housing market is becoming more and more capacitive consumer sentiment.
Mortgage applications for home purchases fell 3% last week compared to last week, according to the Mortgage Association’s Seasonal Adjustment Index. The volume was 14% higher than the same week a year ago.
This was down from 6.93% to 6.84%, with an average contract rate of 30 years fixed-rate mortgage with conforming loan balances, under $806,500, with points increasing to 0.66 to 0.66 including the origin fee for the 20% down payment loan. This was the lowest rate since April, and was only 10 basis points lower than the same week a year ago.
“We’re committed to providing a great opportunity to help you,” said Joel Kang, vice president and vice-chief economist at MBA. “Even with low average mortgage rates, applications have declined over the week as continued economic uncertainty places emphasis on potential home buyers’ purchase decisions.”
Applications to refinance mortgages, which are usually the most sensitive to interest rate movements, fell 2% a week despite lower interest rates. But they were 25% higher than the same week a year ago.
“Refinance activities have declined in both traditional and government borrowers. However, VA applications are bucking the trend with a 2% increase in purchase applications and a slight increase in refinance applications,” Kan said.
Despite the release of several economic reports, it didn’t move much this week. There is a possibility of more reactions after today’s Federal Reserve announcement on interest rates.
“This has nothing to do with ‘cut vs. cut’ (no chances of rate cut) and anything to do with the other information the Fed presents on the day of its release,” wrote Matthew Graham, chief operating officer of Mortgage News Daily. “Of this information, it is a dot plot (a chart of the Fed’s economic forecast material showing rate outlook for each Fed member over the next few years), and has the most weight.”
