Jul 29, 2024
Significant Drop in US Mortgage Applications as Rates Stabilize
Discover the latest trends in US mortgage applications, which have seen the most significant decline in nearly two months despite stable rates.
In the fourth week of July, US mortgage applications experienced a sharp decline of 3.9%, marking the most significant drop in nearly two months, as reported by the Mortgage Bankers Association. This downturn continued from a 2.2% decrease the previous week, occurring even as mortgage rates stabilized at a low of 6.82%. Applications to buy homes fell by 1.5%, and refinance applications plummeted by 7.2%.
Overview of Recent US Mortgage Application Trends
Recent Decline in Mortgage Applications
The Mortgage Bankers Association reported a significant 3.9% drop in US mortgage applications in the last week of July, the steepest fall observed in almost two months. This decline extended beyond the previous week's 2.2% drop, indicating a cooling mortgage market.
Stability in Mortgage Rates
Despite the decline in applications, mortgage rates have held steady. In July, rates were reported at their lowest since February, standing at 6.82%. This stability is concurrent with a broader expectation of rate cuts by the Federal Reserve, anticipated to occur multiple times before the end of 2024.
Specifics of the Decline
The data reveals a 1.5% decrease in home purchase applications, marking a consistent decline over three consecutive weeks. On the other hand, refinance applications saw a more pronounced drop of 7.2% from the previous week.
Market Expectations and Future Projections
Market participants are adjusting their expectations, factoring in potential rate cuts by the Federal Reserve within the next year. These anticipations are influencing current mortgage rates and application numbers.
The Bottom Line
The US mortgage market is currently experiencing a notable downturn in applications despite stable rate conditions. Prospective homebuyers and those looking to refinance may find current rates appealing, though the market's future dynamics will heavily depend on forthcoming economic policies and rate adjustments by the Federal Reserve.
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