Mortgage Demand Surges as Interest Rates Fall for 3rd Straight Week: MBA

Mortgage market activity surged last week as interest rates declined for the third consecutive week, new industry data released on April 22 show.

Total mortgage applications climbed nearly 8 percent for the week ending April 17, according to the Mortgage Bankers Association.

Application for new-home purchases advanced 10 percent, while refinancing jumped 6 percent.

“Mortgage rates declined last week as financial markets responded positively to the Middle East ceasefire and the lower trend in oil prices,” Mike Fratantoni, the group’s chief economist and senior vice president, said in a news release.

“Despite the geopolitical uncertainty, housing demand is being supported by a still resilient job market, and homebuyers are experiencing a buyer’s market in most of the country given the higher levels of inventory relative to last year.”

The average 30-year fixed-rate mortgage eased to 6.35 percent, the lowest level in five weeks.

After climbing to a recent peak of 6.57 percent, the 30-year has slowed by about 20-plus basis points.

Mortgage rates generally track the U.S. Treasury market, particularly the benchmark 10-year yield. Yields on government bonds accelerated in March amid the war in Iran. Treasury yields have stabilized this month, with the 10-year falling below 4.29 percent after eyeing 4.5 percent.

Optimism that the eight-week-old Iranian conflict will reach a conclusion has supported the gradual decline, “creating a more positive market backdrop heading into” the busy spring homebuying season, says Jeff DerGurahian, head economist and CIO at loanDepot.

Modest relief at the pump and low layoffs could help prospective homebuyers navigate the U.S. housing market amid resilient economic conditions.

“And this could all spell good news for potential homebuyers who have been waiting for a little more clarity before making a move,” DerGurahian said in a note emailed to The Epoch Times.

“If peace talks keep moving in the right direction and energy prices continue to ease, it could pave the way for lower mortgage rates and give the tail end of the spring season a real boost.”

The national average for a gallon of gasoline is still slightly above $4, though a dozen states are paying below $3.66.

The number of Americans filing new applications for unemployment benefits hovers around historically low levels of about 200,000.

Meanwhile, current mortgage rates have seen little movement.

As of April 22, the 30-year fixed-rate mortgage is 6.33 percent, according to Mortgage News Daily.

The near-term direction of global financial markets will remain uncertain while the United States and Iran iron out a peace agreement. President Donald Trump extended the U.S. ceasefire with Iran on April 21, but the timeline for a deal continues to be muddied.

Mixed Landscape

Despite improving real estate fundamentals, the spring housing market is “unseasonably slow,” according to Redfin experts.

Homebuyers are waiting on the sidelines for conditions to move further in their favor, while sellers are trying to sell residential properties at prices near pandemic-era levels. As a result, the housing industry is not seeing much activity.

Data from the real estate platform showed that 13.4 percent of home-sale agreements—or more than 50,000 contracts—were canceled, the highest level since 2023.

Ultimately, it is a buyer’s market, with approximately 600,000 more sellers than buyers, says Patricia Ammann, a Redfin Premier agent in Arlington, Virginia.

“Buyers are getting cold feet,” Ammann said in a report.

“There have been layoffs, ups and downs in the market and geopolitical turmoil—and on top of all that, housing costs are still high. Because buyers are considering committing to spending so much money in uncertain times, they’re extremely picky, which is leading some of them to back out before a deal closes.”

Despite the trends, some sellers are resisting price cuts.

Home prices jumped 0.1 percent in March, representing the third consecutive month of the same increase. The median asking price is slightly above $426,000.

Other homeowners are refraining from listing their properties in a soft landscape. New listings fell 2.6 percent year over year during the four weeks ending April 5.