Key Metrics
19.61
Heat Index-
Impact LevelMedium
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Scope LevelNational
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Last Update2025-08-06
Key Impacts
Negative Impacts (10)
Event Overview
A persistent decline in mortgage demand despite reduced interest rates highlights economic uncertainty and potential consumer hesitancy. This unexpected trend suggests broader financial caution, as lower borrowing costs have not spurred increased housing market activity. Analysts may reassess market dynamics in light of these conflicting economic indicators.
Collect Records
Mortgage Demand Drops for Third Consecutive Week Despite Slight Rate Ease
Mortgage demand has declined for the third straight week, even as interest rates showed a slight decrease. According to the Mortgage Bankers Association's seasonally adjusted index, total mortgage application volume dropped by 3.9% last week compared to the previous week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.92% from 6.98%, with points falling to 0.66 from 0.67, including the origination fee for loans with a 20% down payment. Despite this, refinance applications, which are highly sensitive to rate changes, declined by 4% for the week, though they were 42% higher than the same week last year. Joel Kan, an MBA economist, noted that refinance activity fell across both conventional and government segments, with the average refinance loan size being the smallest since July 2024. Purchase applications also fell by 4% for the week but were 18% higher than the same week last year. The sluggish spring season has seen closed sales lagging behind last year's figures, despite higher mortgage demand. The market is currently experiencing increased supply, with inventory levels at their highest in five years, yet sales remain subdued. Mortgage rates started the week relatively flat, with potential significant movement expected following the release of the monthly employment report on Friday.