Purchase activity slipped by 1% but was still up 14% annually, reflecting a market where buyers remain cautious amid persistent affordability challenges and economic uncertainty.
“With mortgage rates on fixed-rate loans little changed last week, refinance application activity generally declined, with the exception of a modest increase for FHA refinance applications,” Mike Fratantoni, MBA’s senior vice president and chief economist, said.
“Refinance volume remains somewhat elevated relative to levels of a month ago. Purchase activity declined by about 1 percent for the week but continues to show moderate growth on an annual basis, and stronger growth for FHA loans, favored by first-time homebuyers,” Fratantoni said.
Borrowers shift to ARMs as fixed rates remain high
Adjustable-rate mortgages (ARMs) gained traction as borrowers sought relief from high fixed rates. The ARM share of activity rose to 9.5% from 8.4% the prior week.
“Our survey shows 5/1 ARM rates are averaging almost a percentage point below 30-year fixed rates, and this differential is leading more purchase and refinance applicants to consider ARMs,” Fratantoni said.