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Mortgage Demand Remains Subdued Despite Slight Rate Decrease

Mortgage Demand Remains Subdued Despite Slight Rate Decrease

Despite a slight decrease in mortgage rates, mortgage demand remained subdued for the second consecutive week, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending March 22.

The survey reported a 0.7% decrease in mortgage applications on a seasonally adjusted basis. Joel Kan, MBA’s vice president and deputy chief economist, noted that purchase applications were essentially unchanged, indicating that homebuyers are waiting for further rate decreases and more listings to enter the market.

Purchase loan application volume dropped by 0.2% from the previous week, while refinance volume fell by 2%. As of the latest data, the 30-year fixed rate on HousingWire’s Mortgage Rates Center stood at 7.16%, with rates on jumbo loans remaining unchanged at 7.14%.

Kan also mentioned that lower rates should eventually lead to more inventory as the lock-in effect diminishes. However, he cautioned that this process is likely to occur gradually, as the MBA forecasts rates to move toward 6% by the end of the year. With rates remaining elevated, there is currently little incentive for rate/term refinances.

The Federal Housing Administration (FHA) share of total applications decreased to 12%, while the U.S. Department of Veterans Affairs (VA) share fell to 12%. 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.

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