There was a decline in mortgage demand over the past week, even though the interest rate for home loans stayed stable, as noted by the latest Mortgage Bankers Association (MBA) survey. Unaltered at 6.52%, the rate for a 30-year, fixed-rate mortgage remained the same. However, application volumes dipped by 6.7% within the week, reaching its lowest point since July, owing to fewer applications for both purchases and refinancing, compared to the previous week.
Despite the fall in mortgage applications over the week, it was observed that the purchasing activity is currently higher than it was last year. As such, it marks the fifth consecutive week where the application rate for purchasing has been stronger than last year.
"Even though rates have witnessed a recent hike, they are still over a full percentage point lower than they were a year ago, keeping several homebuyers in the market," stated Joel Kan, the deputy chief economist and vice president of MBA.
Inventory increment is also supporting the situation as Realtor.com reported a 34% rise in active listings in September versus a year ago, even though sales are still sluggish. "The inventory for sale is beginning to expand, and some markets have seen a softening in home-price increases, offering more options for buyers, combined with these lower rates," added Kan.