Mortgage demand slides to lowest level since early March

Mortgage applications fell by 5.7% week over week

Mortgage applications slumped heading into Memorial Day weekend. Applications decreased by 5.7% on a seasonally adjusted basis during the week ending May 24, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey. 

The MBA said the 30-year fixed mortgage rate rose for the first time in four weeks, to 7.05% from 7.01%. (Other sources, such as HousingWire’s Mortgage Rates Center, did not register any increase over the period. On Wednesday, the Mortgage Rates Center showed the average 30-year fixed rate for conventional loans at 7.25%, down from 7.33% one week earlier.) 

“Mortgage rates increased for the first time in four weeks, with the 30-year fixed rate up to 7.05%and all other loan types also seeing increases. The uptick in rates led to a decline in mortgage applications heading into Memorial Day weekend,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. 

Overall, Kan noted that both purchase and refinance applications fell, pushing overall activity to the lowest level since early March. 

Purchase loan application volume decreased by 1% from one week earlier, while the refinance application fell by 14% week over week.

“Borrowers remain sensitive to small increases in rates, impacting the refinance market and keeping purchase applications below last year’s levels. There continues to be limited levels of existing homes for sale and many buyers are struggling to find listings in their price range that meet their needs,” Kan added.

The average mortgage rate on jumbo loans (balances greater than $766,550) also increased week over week to 7.22%, down from 7.18%.

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