Despite the drop in 30-year fixed mortgage rates last week, weekly mort𓃲gage applications decreased ♔by 2.9% to the lowest level since December 1996.

That's according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Sept. 1. The report showed buyers are still being deterred by high rates an𝔉d few options on the market.

Rates Still Higher Than A Year Ago

While mortgage rates dropped from the week prior, they are still more than a full percentage point higher than they were this time last year. That's a key reason for the decline in mortgage applications, according to Joel Kan, MBA’s Vice President and Deputy Chief Economist.

“The refinance index dropped to its lowest level since January 2023, driven by a 6% decline in conventional refinances,” Kan said.

Buyer Deterred By High Rates, Low Inventory

The Index decreased by 5% on an unadjusted basis from the previous week. Compared to last week, the Refinance Index fell by 5%, and 30% from one year ago. The seasonally adjusted Purchase Index decreased by 2% compared to one week earlier. The unadjusted Purchase Index decreased by 5% from ꦗthe previous week and was 28% lower than one year ago.

The FHA share of applications jumped to 13.7% from 13.2% last week, while the VA share dropped from 11.6% last week to 11.3% this week. The USDA share of applications also increased slightly from 0.4% last week to 0.6% this week.ಌ

“Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates,” said Kan. 

The refinance share of applications also took a slight drop from 30.1% to 30% of total applications, while the adjustable𝕴-rate mortgage (ARM) share of activity decreased to 6.7% of total applications. 

With most borrowers having loans with rates below 4%, 澳洲幸运5官方开奖结果体彩网:refinancing doesn't make sense financially. Despite hi😼gh home equity rates, borrowers are more likely to take out a second loan to pull cash out instead of refinancing and losing their low interest rates.