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However, while the falling rates may seem like good news for homebuyers, borrowing costs remain high and housing inventory remains low, both of which are keeping a cap on homebuying activity.
In fact, the Mortgage Bankers Association (MBA) reported that applications to buy a home declined for the first time in a month, with their index of mortgage applications to purchase a home decreasing by 3.5%.
That being said, the MBA’s index of refinancing applications also fell, dropping by 5.4%.
This suggests that while potential buyers may be hesitant to enter the market right now, current homeowners are taking advantage of the lower rates to refinance their existing mortgages.
The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks, and thrifts to determine trends in the housing market.
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