A sale sign will be on display near my home in Austin, Texas on April 24, 2025.
Brandon Bell | Getty Images
Mortgage rates have fallen for the second week in a row, but not as much. That’s thanks to more negative news about the economy. But nonetheless, weekly mortgage demand rose 11%, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balances fell from 6.89% to 6.84%, below $806,500, with points increasing from 0.68 to 0.68, including the origin fee for a 20% down payment loan. That rating was 34 basis points higher in the same week as a year ago.
“Last week’s economic news includes negative readings of first quarter GDP growth and further signs of contraction in the manufacturing sector, mixed with a solid April employment report. The net impact on mortgage rates had returned to levels since early April, said Michael Fratantoni, MBA’s senior vice president and chief economist.
Mortgage applications to buy mortgages rose 11% a week, 13% higher than the same week a year ago. To drive the increase was a surge in traditional loan demand. This was called “a surprisingly strong movement given the prolonged economic uncertainty.”
“Traditional loan borrowers tend to have larger loan sizes and more likely to become buyers,” he said.
The housing market was clearly slower in April. Some potential buyers say they are afraid of major economic moves given the potential impacts from tariffs. Some people ride a roller coaster on the stock market at the beginning of the month. Real estate agents still report strong demand, but fewer borrowers willing to sign a contract.
Applications for mortgage refinancing also increased 11% in a week, 51% higher than the same week a year ago. That demand was driven by veterans, or VA, loans, and rose 26% that week.
Mortgage rates haven’t moved much to begin this week, but could change more quickly with Wednesday’s Federal Reserve meeting. The Federal Open Market Committee (FOMC) is not expected to cut interest rates, but unexpected commentary from Federal Reserve Chair Jerome Powell could move the market, resulting in mortgage rates being more critical.
