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- Interest rates also dropped for the second consecutive week.
Mortgage applications are down again even though interest rates also dropped for the second straight week, according to the Mortgage Bankers Association’s weekly report.
According to the Weekly Applications Survey, applications fell 1.2% from a week earlier. On an unadjusted basis, the Index decreased 2% compared with the previous week.
The Refinance Index Rate also decreased by 4% from the previous week and was 75% lower than the same week one year ago.
And the seasonally adjusted purchase index increased 0.2% from one week earlier. The unadjusted purchase index decreased 1% compared with the previous week and was 16% lower than the same week one year ago.
“The 30-year fixed rate declined for the second straight week to 5.46% but remains well above what borrowers were used to over the past two years. Most refinance borrowers continue to remain on the sidelines as a result, and refinance applications have fallen in nine of the past 10 weeks. Compared to January 2022, refinance activity is down 66%,” Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting, said.
Kan said that higher mortgage rates are also having an effect on purchase market conditions, as the purchase index remained close to lows last seen in the spring of 2020 when a significant portion of activity was put on hold due to the onset of the pandemic.
“Currently, higher rates, low inventory, and high prices are keeping prospective buyers out of the market,” Kan said.
Other highlights of the survey, which covers 75% of the U.S. retail residential mortgage applications, include:
The refinance share of mortgage activity decreased to 32.3% of total applications from 33% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.4% of total applications.