Mortgage Demand Surges as Rates Retreat for Third Consecutive Week

Mortgage application volume saw a significant uptick last week, with total demand rising 7.9% according to the Mortgage Bankers Association (MBA). This trend marks the third consecutive week of declining rates, providing a boost to a spring housing market that had previously shown signs of stagnation. The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balances of $832,750 or less fell to 6.35%, down from 6.42% the previous week. This decline was largely attributed to positive market reactions to a Middle East ceasefire and a downward trend in global oil prices. Purchase activity led the recovery, with applications for home purchases increasing 10% weekly and 14% compared to the same period last year. Conventional purchase loans specifically rose by 11%. Refinancing demand also grew, increasing 6% for the week and surging 52% year-over-year, as homeowners capitalized on rates that were 55 basis points lower than a year ago. MBA Chief Economist Mike Fratantoni noted that a resilient labor market and increased inventory levels relative to last year are supporting demand, creating a more favorable environment for buyers in most regions. Despite the current momentum, volatility persists. Recent data from Mortgage News Daily indicates slight upward pressure on rates due to strong employment figures and ongoing uncertainty surrounding US-Iran diplomatic negotiations.