Mortgage rates drop for the first time in 2 months, but demand still falls further

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1. 1h ago

   Mortgage Rates Fall, But Demand Plummets

   Mortgage rates have dropped for the first time in two months, with the average 30-year fixed rate decreasing to 7.32% for the week ending October 22. Despite this relief, overall demand continues to decline as the housing slump deepens. Total mortgage application volume dropped 5.3% last week compared to the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Mortgage applications to buy a home fell 18% from last year. Experts note that lower borrowing costs were not enough to boost application activity for new mortgage loans or refinancing.

   Why it matters

   The ongoing drop in mortgage demand highlights a persistent affordability crisis in the housing market even as borrowing costs retreat slightly from recent highs around 7.4%. A significant portion of existing homeowners secured much lower rates years ago, creating a wide gap that locks inventory in place and discourages current buyers. This broader housing squeeze is expected to maintain upward pressure on rental markets.

   What is confirmed

   • The average rate on 30-year fixed mortgages decreased to 7.32% for the week ending Oct. 22, down 8 basis points from last week.
   • Total mortgage application volume dropped 5.3% last week from the previous week, according to the Mortgage Bankers Association.
   • Mortgage applications to buy a home fell 18% from last year.
   • Refinancings accounted for 39.0% of total mortgage applications in the week ending October 16, compared to 37.7% the prior week.
   • 49.1% of outstanding mortgages carried interest rates of 4% or lower in the second quarter.

   Still unconfirmed

   • Housing prices are not coming down because of interest rates, and rents are going to start exploding again within 24 months according to Grant Cardone.

   What to watch next

   • Subsequent weekly mortgage application volume from the Mortgage Bankers Association
   • Future movements in 30-year fixed mortgage rates
   • Upcoming rental market price trends and housing inventory reports
   Sources used for this update (16)

   1. CNBC — Mortgage rates drop for the first time in 2 months, but demand still falls further
   2. Yahoo Finance — Grant Cardone Says Housing Prices ‘Are Not Coming Down Because Of Interest Rates’ and ‘Rents Are Going To Start Exploding Again’ Within 24 Months
   3. Realtor.com — Mortgage Applications to Buy a Home Fall 18% from Last Year as Housing Slump Deepens
   4. Bloomberg.com — US Mortgage Rates Fall for First Time Since Early August
   5. TradingView — US MBA: REFINANCINGS AT 39.0% OF TOTAL MORTGAGE APPLICATIONS IN OCTOBER 16 WEEK VS 37.7% IN PRIOR WEEK
   6. Yahoo Finance — Mortgage demand is falling off a cliff, even as rates stabilize
   7. Substack — High Frequency Data: Housing Slump Deepens
   8. TradingView — US MBA DEPUTY CHIEF ECONOMIST KAN: ‘LOWER RATES WERE NOT ENOUGH TO BOOST APPLICATION ACTIVITY’ FOR NEW MORTGAGE LOANS OR REFINANCING
   9. Yahoo Finance — U.S. housing squeeze could keep rents higher for longer, experts warn
   10. Red Book Lumber Data — Mortgage Applications Decrease in Latest MBA Weekly Survey
   11. www.cnbc.com — Mortgage rates drop for the first time in 2 months, but ...
   12. finance.yahoo.com — Mortgage rates dropped for the first time in months
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