Mortgage applications to buy a home fell 4% last week, compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Despite more listings coming on the market, demand remains flat compared to the same week last year.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.97% from 7.02%, with points increasing slightly. This drop is attributed to lower Treasury yields following a recent Federal Reserve meeting and volatile stock market fluctuations.
Refinance applications, however, saw a significant increase of 12% from the previous week, largely due to low borrowing rates that have left many homeowners with rates well below current offers. Mortgage applications for buying a home are now 39% lower than they were in February 2019, and home sales are running at a near-30-year low.
Home prices continue to rise, with sellers offering price cuts of 15.6% in January compared to last year. Despite this, most sellers remain competitive, holding firm on their list prices. The supply of homes for sale rose 25%, but the average time to sell a home increased to 54 days, the longest since March 2020.
The market’s sluggishness is attributed to low mortgage rates and rising home prices, leaving buyers hesitant to make a move. As interest rates remain relatively stable, it’s unclear when the housing market will see significant changes.
Source: https://www.cnbc.com/2025/02/05/homebuyer-mortgage-demand-drops-further-a-troubling-sign-for-the-spring-market.html