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3mo ago

Mortgage Rates Hit Two-Month Low, but Housing Demand Remains Sluggish

Despite falling to 6.88%, the lowest rate since mid-December, mortgage applications show minimal growth as high prices and economic concerns persist.

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US mortgage rates track Treasury yields, which have fallen in the past week as investors seek safe havens amid a selloff in stocks and oil markets.
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Overview

  • The average 30-year fixed mortgage rate dropped to 6.88% last week, marking its lowest level in two months, according to the Mortgage Bankers Association (MBA).
  • Total mortgage application volume declined by 1.2%, with refinance applications falling 4% week-over-week, despite being 45% higher than the same period last year.
  • Purchase applications remained flat compared to the prior week, showing only a modest 3% increase year-over-year as affordability challenges and limited inventory persist.
  • Falling Treasury yields, driven by weaker consumer spending and economic slowdown concerns, contributed to the decline in mortgage rates.
  • While FHA refinance applications rose 8%, overall demand for mortgages remains subdued, reflecting cautious consumer sentiment and elevated home prices.