Mortgage rates saw a slight decrease last week, with the average contract interest rate for 30-year fixed mortgages dropping to 6.51% from 6.57%. Despite this, the mortgage market remains under pressure due to ongoing economic uncertainty related to the Iran war, leading to a 0.8% decline in total mortgage application volume. Notably, while applications for home purchases increased by 1% week-over-week, they are down 7% compared to the same period last year, marking the first year-over-year decline since January 2025.
The mixed performance across loan types highlights a divergence in the market; FHA purchase applications rose by 5%, buoyed by lower rates compared to conventional loans. Conversely, refinance applications fell 3% week-over-week and are down 4% year-over-year, indicating that many borrowers are deterred by rising rates.
As mortgage rates are expected to trend lower following a recent ceasefire announcement, market professionals should monitor how these shifts impact borrower sentiment and overall housing market activity in the coming weeks.
Source: cnbc.com