Mortgage demand remained subdued for the second consecutive week despite slightly lower mortgage rates.
Mortgage applications decreased by 0.7% on a seasonally adjusted basis during the week ending March 22, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey.
“Purchase applications were essentially unchanged, as homebuyers continue to hold out for lower mortgage rates and for more listings to hit the market,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Lower rates should help to free up additional inventory as the lock-in effect is reduced, but we expect that will only take place gradually, as we forecast that rates will move toward 6% by the end of the year. Similarly, with rates remaining elevated, there is very little incentive right now for rate/term refinances.”
Both purchase and refinance activity decreased during the week. Purchase loan application volume dropped by 0.2% from one week earlier. Meanwhile, refinance volume fell by 2% from the prior week.
As of Wednesday, the 30-year fixed rate on HousingWire’s Mortgage Rates Center stood at 7.16%.
The MBA survey shows that the average mortgage rate for 30-year fixed loans with conforming balances ($766,550 or less) decreased to 6.93%, down from 6.97% last week. Meanwhile, rates on jumbo loans (balances greater than $766,550) remained unchanged week over week at 7.14%.
The Federal Housing Administration (FHA) share of total applications decreased to 12% last week, down from 12.1% the week before. The U.S. Department of Veterans Affairs (VA) share fell to 12%, down from 12.1% the week before. And the U.S. Department of Agriculture (USDA) share remained unchanged at 0.5%.
The MBA survey, conducted weekly since 1990, covers more than 75% of all U.S. retail residential mortgage applications.
