Homebuyers are in no rush to dive into the spring housing market. Even as more listings emerge, mortgage rates remain stubbornly high, and prices continue their relentless climb.
Mortgage applications for home purchases slid another 4% last week, according to seasonally adjusted data from the Mortgage Bankers Association (MBA). Year-over-year demand remains stagnant, signaling ongoing buyer hesitation.
The average loan size for a purchase loan has climbed since January, reaching $447,300 last week—the highest level since October 2024—amid weaker government-backed purchase activity, according to MBA data.
The average 30-year fixed mortgage rate dipped slightly to 6.97% from 7.02%, while points inched up to 0.64 from 0.63 for loans with a 20% down payment.
That rate, though lower than a year ago by 17 basis points, is still keeping many buyers on the sidelines.
Mortgage rates moved lower last week, consistent with lower Treasury yields following the FOMC meeting and a volatile week for the stock market, according to MBA. The 30-year fixed rate declined to its lowest level in six weeks.
Refinancing applications responded immediately, jumping 12% from the prior week and 17% from last year.
While the percentage increase appears significant, refinancing activity remains low as most homeowners hold mortgages with rates far below today’s offerings.
Home purchases are suffering.
Mortgage applications to buy a home are now 39% lower than in February 2019, before the pandemic. Home sales are hovering at levels not seen in nearly 30 years, even as national home prices keep setting records.
Some sellers are adjusting. In January, 15.6% of listings saw price cuts, up from 14.7% a year ago, per Realtor.com. Still, many sellers hold firm, banking on tight inventory to keep demand competitive.
The supply of homes for sale increased 25% compared to last year, but not because of new construction.
Instead, homes are lingering on the market longer. The average time to sell hit 54 days in January, the longest since March 2020, according to Redfin.
Even with this inventory boost, housing supply remains 25% below pre-pandemic levels from January 2019.
For now, buyers seem content to wait, watching mortgage rates and price trends with cautious optimism.
Business leaders in real estate are closely monitoring the market, as fluctuations in interest rates and home prices influence long-term industry trends.
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