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A “For Sale” sign is prominently displayed in front of a house in Miami, Florida, on April 16, 2025.
As reported by the Mortgage Bankers Association, the demand for mortgages has experienced a significant decline, attributed largely to elevated interest rates and growing uncertainties about the direction of the economy. In the latest figures, total mortgage application volume plunged by 12.7% compared to the previous week, as noted in their seasonally adjusted index.
The average interest rate for 30-year fixed-rate mortgages with conforming loan amounts—defined as $806,500 or less—rose from 6.81% to 6.90%, with points increasing from 0.62 to 0.66, which includes the origination fee for loans with a 20% down payment. This marks the highest rate seen in the last two months, although it is still 34 basis points lower than the equivalent week from the previous year. In just a fortnight, rates have surged by nearly 30 basis points.
This increase in mortgage rates has notably impacted refinancing activities, which dipped by 20% in the past week. Despite this decline, requests for refinancing are still up by 43% compared to the same time last year. The share of refinancing in total mortgage applications fell to 37.3%, down from 41.3% the week before.
Meanwhile, applications to purchase homes also witnessed a 7% decrease for the week, with only a marginal 6% increase year over year. Homebuyers face the dual challenges of rising interest rates and escalating home prices, compounded by recent volatility in the stock market, which has led many to hesitate in liquidating stock assets for down payments.
Joel Kan, vice president and deputy chief economist at the MBA, remarked, “Similar to the previous week, economic uncertainty and rate volatility impacted prospective homebuyers.”
On a different note, mortgage rates showed an upward trend on Monday before stabilizing on Tuesday, according to a separate analysis from Mortgage News Daily. Matthew Graham, COO at Mortgage News Daily, commented, “Headlines regarding Trump’s remarks about Fed Chair Powell rattled the market and sent rates lurching higher. However, 24 hours later, the lack of any further escalation has led to calmer market behavior, resulting in generally flat interest rates.”
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