According to the Mortgage Bankers Association (MBA), mortgage demand in the U.S. has reached its lowest level since May. The total volume of mortgage applications fell by 3.8% last week, despite minimal changes in interest rates.
Mortgage Applications at a Low Since May
The overall volume of mortgage applications in the U.S. declined by 3.8% over the past week. The average interest rate for 30-year fixed mortgage loans was 6.83%, slightly down from the previous level of 6.84%. However, this did not attract buyers to the market.
Reasons for Declining Mortgage Demand
Joel Kan, deputy chief economist at MBA, stated, "Mortgage applications fell to their lowest level since May, with both purchase and refinance activity declining over the week. There is still plenty of uncertainty surrounding the economy and job market, which is weighing on prospective homebuyers' decisions." Applications to buy a home dropped 6% compared to the previous week, while refinance applications declined by 1%. Overall, the decrease in activity is linked not to high home prices, but to market uncertainty.
Mortgage Market Outlook
Recent changes in interest rates have not provided enough incentive for an increase in refinancing activity. While rates have dipped slightly, significant shifts may come after the Federal Reserve's announcement regarding interest rate decisions mid-week. Anticipated comments from Fed Chair Jerome Powell and the government's monthly employment report at the end of the week could influence the current state of the mortgage market.
The situation in the U.S. mortgage market remains tense, partly due to upcoming economic reports and uncertainty affecting potential buyers' decisions.
