Applications Drift Down For Another Week

Mortgage applications drifted down again despite steadily cooling rates.

The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — fell 1.2%, adding to the week prior’s 6.6% drop.

The data includes an adjustment for President’s Day.

Adjusted purchase applications were unchanged, while the unadjusted index was down 5% and 3% higher year-over-year.

Refinances, which took a turn last week, were reenergized by an influx of FHA applications. They accounted for 38.9% of applications and were up 45% on the year.

Rates softened again, reaching 6.88%, its lowest point since December 2024. But buyers, feeling pessimistic about the economy and affordability, aren’t taking the bait.

“Treasury yields moved lower on softer consumer spending data as consumers are feeling somewhat less upbeat about the economy and job market,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. 

Kan noted that purchase applications experienced a boost annually thanks to rising inventory. Buyers will have many more options this spring than in the last few years.

Affordability remains a problem for new buyers with no home equity to fall back on. Price gains posted their 19th consecutive all-time high in December despite trending down overall.

Current homeowners can benefit from ongoing price strength, however.

“Through this recent market cycle, the ability of Americans to grow wealth by participating in the upside of the U.S. housing market, particularly if done through a leveraged position by securing a mortgage, has proven to be historically beneficial,” said Brian D. Luke, CFA, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices.