Mortgage applications fell 2.9% compared with the prior week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Sept. 1.
“Mortgage applications declined to the lowest level since December 1996, despite a drop in mortgage rates,” Joel Kan, MBA vice president and deputy chief economist, said in a statement. “Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates.”
According to a recent Kiplinger report, 30-year fixed-rate loans are averaging 7.1%, roughly the same as their peak in early November, while 15-year fixed-rate loans are around 6.5%.
Kan noted that last week the 30-year fixed-mortgage rate decreased to 7.21 percent but that rates remained more than a full percentage point higher than a year ago. This was, he said, despite mixed data on the health of the economy and signs of a cooling job market.
The Market Composite Index, which measures mortgage loan application volume, decreased 2.9% from the prior week on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index fell 5 percent compared with the previous week.
The Refinance Index fell 30% from last year
The Refinance Index declined 5% from the previous week and decreased 30% from the year-ago period, reaching its lowest level since January 2023. This was driven by a 6% decline in conventional refinances, the MBA said.
Home purchases dropped 5% from the prior week, and 28% from the same week a year ago, both on an unadjusted basis.
The latest economic data suggests that the Fed could pause interest rate hikes for the rest of the year and possibly cut rates next year. However, Fed Chair Jerome Powell has “repeatedly emphasized that it would be a mistake to cut rates too early and risk letting inflation rebound,” as Kiplinger previously reported.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
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