Mortgage Demand Surges as Rates Hit 10-Week Low

Mortgage demand continues to rise as mortgage rates drop to a 10-week low, with the Mortgage Bankers Association's index of mortgage applications increasing by 3% last week. The average rate on a 30-year loan also dropped to 7.37%, the lowest level in 10 weeks. However, while demand for purchasing homes increased by 5%, refinancing activity declined by 9%. The ongoing low supply of existing homes on the market is depressing the purchase market, and many borrowers have already locked in lower rates in 2020 and 2021. The interest rate-sensitive housing market has cooled due to the Federal Reserve's tightening campaign, but economists believe the central bank is done raising interest rates.