Mortgage Rates Hold Steady as Demand Stagnates: What Homebuyers Need to Know

Mortgage rates remained at 6.58% for 30-year fixed-rate loans, according to the Mortgage Bankers Association (MBA), while applications for home purchases and refinances saw modest declines.

Rate Stability and Slowing Demand

The 30-year fixed-rate mortgage averaged 6.58% last week, according to the MBA’s weekly survey. Despite the marginal rise, mortgage demand remains subdued, with total applications falling 2.2% compared to the previous week.

“Government purchase volume increased modestly, led by a 5 percent gain in VA purchase applications, while conventional purchase activity declined. Refinance application volume was down 4 percent, as homeowners saw little enticement to act with rates still elevated,” said Mike Fratantoni, senior vice president and chief economist at the MBA.

Refinance Activity Declines as Homeowners Hold Steady

Refinance applications dropped 4% for the week and were 8% higher than the same week one year ago. Most lenders say that unless a borrower can cut at least 3/4 of a percentage point off their rate, the cost of the refinance isn’t worth it.

Purchase Applications Edge Lower as Inventory Rises

Home purchase applications fell 1% for the week and were 5% higher than the same week one year ago. Buyers are starting to get more leverage in the market, as inventory increases and homes sit for longer. More agents are now saying that the market is balanced, after several years of it being a seller’s advantage.

Economic Factors Influence Rate Trends

Higher inflation leads to higher rates, all else equal,” wrote Matthew Graham, chief operating officer at Mortgage News Daily.

What’s Next for the Housing Market?

While overall mortgage demand is down, products offering lower down payments are gaining steam.