Mortgage demand remains weak as ongoing low housing inventory and high 30-year mortgage rates have prevented prospective buyers from entering the market, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
Mortgage applications declined 0.8% for the week ending Sept. 8, compared to the prior week, the survey showed. The results include an adjustment for the Labor Day holiday.
“Mortgage applications decreased for the seventh time in eight weeks, reaching the lowest level since 1996,” Joel Kan, MBA vice president and deputy chief economist, said in a statement.
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The 30-year, fixed-rate mortgage grew to 7.27% last week and was 40 basis points higher than where it was in late July, Kan said. “Given how high rates are right now, there continues to be minimal refinance activity and a reduced incentive for homeowners to sell and buy a new home at a higher rate.”
According to a recent Kiplinger report, the average 30-year, fixed-rate loan rate is 7.12%, compared to 7.18% last week and 5.66% last year. The average 15-year, fixed-rate mortgage is 6.52%, compared to 6.55% a week ago and up from 4.98% last year.
The Market Composite Index, which measures mortgage loan application volume, declined 0.8% on a seasonally adjusted basis from the prior week, and 12% on an unadjusted basis, MBA said.
Home purchase index rose by only 1%
The Purchase Index rose 1%, compared to the prior week. On an unadjusted basis, the index fell 11% from the prior week, and 27% from the same year-ago period.
The Refinance Index, which measures refinancing and prepayment activity, declined 5% from the prior week and 31% from a year ago, reaching its weakest reading since January 2023. The decline can be attributed to high interest rates, the MBA said.
The most recent economic data continues to suggest that the Fed could pause rate hikes for the rest of the year.
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