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Mortgage application volume declined 2% last week despite steady interest rates at 7.02%, reflecting continued weakness in housing market demand.
The impact is particularly notable in refinancing activity, which fell 7% week-over-week, though it remains 5% above last year’s levels. This decline comes despite unchanged interest rates, highlighting the challenging environment created by rates that are 24 basis points higher than a year ago.
Purchase applications showed marginal decline, dropping 0.4% week-over-week and sitting 7% below last year’s levels. However, there are some positive signs, including a 2% increase in FHA purchase loans and strong end-of-year sales figures for both new and existing homes.
Industry experts, including the MBA’s Joel Kan, suggest potential improvement in coming months if rates stabilize and inventory increases, though the upcoming Federal Reserve meeting is not expected to significantly impact the market landscape.
