Mortgage Rates Plummet, Sparking Demand Recovery

Mortgage demand has shown signs of revival as interest rates plummeted, with the Mortgage Bankers Association's index of mortgage applications rising 2.5% last week. The average rate on a 30-year loan dropped to 7.61%, the largest weekly decline since mid-2022. While applications for home purchases increased by 1%, overall application volume remains down 20% compared to the same period last year. The decline in rates has spurred housing demand, but limited inventory and high mortgage rates continue to dampen consumer demand and restrict options for potential buyers.