Demand slows for the second straight week
Mortgage applications fell for the second week in a row as interest rates continued to climb, tempering consumer demand.
Home loan application volume dropped 3.2% on a seasonally adjusted basis – 4% when unadjusted – for the week ending August 4, according to the Mortgage Bankers Association (MBA).
“Treasury yields rates rose last week, and mortgage rates followed suit, due to a combination of the Treasury’s funding announcement and the downgrading of the US government debt rating,” said MBA deputy chief economist Joel Kan. “Rates increased for all loan types in our survey, with the 30-year fixed mortgage rate increasing to 7.09%, the highest level since November 2022. Additionally, the rate for FHA mortgages increased to 7.02%, the highest rate since 2002.”
MBA’s data correlates with Fannie Mae’s Home Purchase Sentiment Index, which showed dampened consumer confidence in the housing market as homebuyers struggle with high home prices and unfavorable mortgage rates.
“Not surprisingly, mortgage applications continued to decline given these higher rates, with overall application counts falling for the third consecutive week, as both purchase and refinance activity declined.”
The purchase index declined for the fourth consecutive week, down 3%, while the refinance decreased 4% from a week ago.
Want to keep up with the latest mortgage news? Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
