"Mortgage applications declined for the fourth consecutive week"
Mortgage applications dropped once again in the past week, according to the Mortgage Bankers Association (MBA), as refinance and purchase loan activity continued to slow amid growing economic uncertainty.
Sharing the results of its mortgage application survey for the week ending July 22, MBA said loan application volume decreased by 1.8% on a seasonally adjusted basis compared to one week earlier. Refinancing and prepayment activity also dropped 4% from the previous week, while purchase loan applications for single-family homes went down by 1%.
“Mortgage applications declined for the fourth consecutive week to the lowest level of activity since February 2000,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Kan explained that households had been dissuaded from entering the housing market due to affordability challenges posed by mortgage rates “remaining well over 5%.” As a result, purchase applications have fallen “close to lows last seen at the onset of the pandemic,” and refinance applications have gone down 83% below its 2021 level.
“Weakening purchase application trends in recent months have been consistent with data
showing a slowdown in sales for newly constructed homes and existing homes,” added Kan. “A potential silver lining for the housing market is that stabilizing mortgage rates and increases in for-sale inventory may bring some buyers back to the market during the second half of the year.”
The refinance share of mortgage activity decreased to 30.7% of total applications from 31.4% the previous week, while the adjustable-rate mortgage (ARM) share of activity decreased to 9.1% of total applications.
Additionally, the weekly average contract rates for different types of loans saw the following changes: