High interest rates continue to stall homebuyer’s dreams as mortgage applications have once again fallen. According to the Mortgage Bankers Association, the Purchase Index decreased 5 percent last week and was 28 percent lower than the same week one year ago—marking a 28-year low.
“Mortgage applications declined to the lowest level since December 1996, despite a drop in mortgage rates,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates. The 30-year fixed mortgage rate decreased to 7.21 percent last week, but rates remained more than a full percentage point higher than a year ago, despite mixed data on the health of the economy and signs of a cooling job market. The refinance index dropped to its lowest level since January 2023, driven by a 6 percent decline in conventional refinances.”
The Refinance Index decreased 5 percent from the previous week and was 30 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 30.0 percent of total applications from 30.1 percent the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.21 percent from 7.31 percent, with points decreasing to 0.69 from 0.73.