With Rates Stagnant, Refis Dwindle But Purchase Demand Inches Up

Mortgage demand remains depressed as refinance demand cools faster than purchase demand heats up.

The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — fell by 1.6%, adding to the week prior’s 2% drop.

Rallying from staggering lows, purchase demand is inching up. Adjusted purchase applications rose 2% while the unadjusted index increased 2% and was 9% higher year-over-year. 

“Last week’s level of purchase applications was its highest since the end of January, driven by a 3% increase in conventional purchases, while government purchase applications were down 2%,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. 

“Overall purchase activity has shown year-over-year growth for more than two months as the inventory of existing homes for sale continues to increase, a positive development for the housing market despite the uncertain near-term outlook.”

Refinances are faring badly, however, as rates stay put in the 6.5% to 7% range. Most homeowners are locked into lower rates and have no incentive to shake things up.

Refis dropped by 6% on the week, though they are still 57% stronger year-over-year. They accounted for 38.6% of all applications.

Rates held steady, moving just 0.1% to 6.70%. They’ve barely moved in weeks, reflecting Wall Street’s uncertain footing.

President Trump is expected to levy “reciprocal” tariffs on more trade partners this week. They’re meant to be payback for tariffs on U.S. goods that Trump’s team considers unfair.