Kan explained that households had been dissuaded from entering the housing market due to affordability challenges posed by mortgage rates “remaining well over 5%.” As a result, purchase applications have fallen “close to lows last seen at the onset of the pandemic,” and refinance applications have gone down 83% below its 2021 level.
“Weakening purchase application trends in recent months have been consistent with data
showing a slowdown in sales for newly constructed homes and existing homes,” added Kan. “A potential silver lining for the housing market is that stabilizing mortgage rates and increases in for-sale inventory may bring some buyers back to the market during the second half of the year.”
The refinance share of mortgage activity decreased to 30.7% of total applications from 31.4% the previous week, while the adjustable-rate mortgage (ARM) share of activity decreased to 9.1% of total applications.
Additionally, the weekly average contract rates for different types of loans saw the following changes: