Mortgage Rates Hit Two-Month Low, but Housing Demand Remains Sluggish

Despite falling to 6.88%, the lowest rate since mid-December, mortgage applications show minimal growth as high prices and economic concerns persist.

The average 30-year fixed mortgage rate dropped to 6.88% last week, marking its lowest level in two months, according to the Mortgage Bankers Association (MBA).
Total mortgage application volume declined by 1.2%, with refinance applications falling 4% week-over-week, despite being 45% higher than the same period last year.
Purchase applications remained flat compared to the prior week, showing only a modest 3% increase year-over-year as affordability challenges and limited inventory persist.
Falling Treasury yields, driven by weaker consumer spending and economic slowdown concerns, contributed to the decline in mortgage rates.
While FHA refinance applications rose 8%, overall demand for mortgages remains subdued, reflecting cautious consumer sentiment and elevated home prices.