Applications Dip For Second Week

Mortgage applications are down for a second week even as rates fell slightly.

The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — decreased by 0.7%, following the week prior’s 1.6% slip.

Adjusted purchase applications slipped by 0.2%, while the unadjusted index was up 2% and 16% lower YOY.

Rates pulled back slightly, clocking in at 6.93%, but remained high enough to deter borrowers, according to MBA Vice President and Deputy Chief Economist Joel Kan.

“Purchase applications were essentially unchanged, as homebuyers continue to hold out for lower mortgage rates and for more listings to hit the market,” he added.

“Lower rates should help to free up additional inventory as the lock-in effect is reduced, but we expect that will only take place gradually, as we forecast that rates will move toward 6% by the end of the year. Similarly, with rates remaining elevated, there is very little incentive right now for rate/term refinances.”

Refinances fell by 2% and accounted for 30.8% of applications, a decline. They remain historically low thanks to the high-rate environment. In the past decade, they averaged 58% of all activity.

Inventory is slowly moving in the right direction. The total number of for-sale homes jumped by 5% during the four weeks ending March 17, Redfin reported, the biggest annual increase since May 2023.

Existing home sales saw a nearly 10% boost in February as consumers come to terms with the market’s “new normal,” according to NAR Chief Economist Lawrence Yun.

“Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices,” he said.