The number of mortgage applications is the lowest it's been since May.
It's the latest evidence that the market is just plain stuck.
The Mortgage Bankers Association reported a 3.8% decrease in its index measuring applications for the week ended July 25, according to data released Wednesday. That was driven by weekly declines in applications for new mortgages and loan refinances.
The takeaway: Borrowers are extremely sensitive to mortgage rates right now, so even a small change can affect their behavior.
This week’s data, for example, reflects consumers pulling back as mortgage rates ended a five-week streak of declines. Even though mortgage rate averages are within a few hundredths of a percentage point of where they started in July, that movement has been enough to deter borrowers from the market.
Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, said for homeowners, the minuscule changes lately have meant that rates are still “high enough that there was not much interest in refinancing.”
Meanwhile, on the buy side, “there is still plenty of uncertainty surrounding the economy and job market, which is weighing on prospective homebuyers’ decisions,” he said in a statement.
This week, news about the labor market, inflation and U.S. economic growth, as well as Wednesday's Federal Reserve meeting, will shed more light on where mortgage rates and borrower activity could be headed next.
