The demand for mortgage drops while interest rates decrease

The weak feeling of consumers weighs strongly on the housing market, while buyers of potential houses are retreating.

Requests for a mortgage to buy a house dropped by 3% last week compared to the previous week, according to the seasonal adjusted index of the Association of Mortgage Bankers. The volume was still 14% higher as the same week a year ago.

This as the average interest rate of the contract for mortgages at fixed rate at 30 years with compliant loan sales, $ 806,500, decreased to 6.84%against 6.93%, with points passing to 0.66 against 0.64, including creation fees, for loans with a payment of 20%. It was its lowest rate since April and was only 10 base points below the same week a year ago.

“Mortgage rates decreased last week, driven by the volatility of the financial market caused by current geopolitical conflicts and current tariff uncertainties,” said Joel Kan, Vice-President and Deputy Chief Economist in MBA. “Even with lower average mortgage rates, requests decreased during the week, because continuous economic uncertainty has weighed on purchasing decisions for potential house buyers.”

Request for refinancing a mortgage, which are generally the most sensitive to interest measures, decreased by 2% for the week, despite the drop in rates. However, they were 25% higher than the same week a year ago.

“The refinancing activity has decreased for conventional borrowers and the government. VA requests have however reversed the trend with a 2% increase in purchase requests and a slight increase in refinancing requests,” noted Kan. “The overall size of the average loan at $ 380,200, was the lowest since January 2025.”

The prices have not changed much to start this week, despite the publication of several economic relationships. There is much more chances of reaction after the announcement of the federal reserve on interest rates today.

“This has nothing to do with” Cut vs no cut “(there is no chance of falling) and everything to do with other information that the Fed presents the announcements,” wrote Matthew Graham, director of the operation at Mortgage News Daily. “This information, it is the dowry plot (a graph in the ECRO economic projection materials show that the rate prospects of Fed members in the coming years) have the most weight.”