Weak consumer sentiment is weighing hard on the housing market, as potential homebuyers pull back.
Applications for a mortgage to purchase a home fell 3% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was still 14% higher than the same week one year ago.
This as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.84% from 6.93%, with points increasing to 0.66 from 0.64, including the origination fee, for loans with a 20% down payment. That was its lowest rate since April and was just 10 basis points lower than the same week one year ago.
“Mortgage rates decreased last week, driven by financial market volatility caused by current geopolitical conflict and ongoing tariff uncertainties,” said Joel Kan, vice president and deputy chief economist at the MBA. “Even with lower average mortgage rates, applications declined over the week as ongoing economic uncertainty weighed on potential homebuyers’ purchase decisions.”
Applications to refinance a home loan, which are usually most sensitive to interest rate moves, declined 2% for the week, despite the drop in rates. They were, however, 25% higher than the same week one year ago.
