Purchase Demand Moves Back Toward 2 Year High; Refis Hold Steady
May 16 2025
Home purchase demand improved improved last week according to the MBA mortgage application survey. The improvement over the previous week was fairly modest, but the index was already the 4th highest reading of the past 2 years. Now it's the 5th highest and the latest update takes its place, moving within striking distance of longer term highs. It's no secret that most measures of mortgage and housing activity have been operating in a low, narrow range compared to where they were a few years ago. The mortgage rate spike of 2022 gets most of the credit for that, and a longer term chart of refinance demand helps contextualize shorter term trends. All that to say, we have to zoom in if we hope to see changes in application demand. In so doing, we find refinance activity still elevated relative to most of the past few years, but not in the 'boomlet' territory seen last Fall. The absence of significant week-over-week movement in refi demand makes good sense in light of minimally-changed mortgage rates. MBA logged a 0.02% increase in the average 30yr fixed rate from the previous week which aligns fairly well with our daily rate tracking. Since then, rates moved a bit higher through mid-week, but have dropped heading into the weekend. The net effect shouldn't be massive for application demand. Here's the MBA's surveyed changes in various rates and points (difference from last week in parentheses):
30yr Fixed:
6.86% (+0.02)
Points: 0.68 (no change)
Jumbo 30yr:
6.85% (−0.01)
Points: 0.49 (+0.03)
FHA:
6.59% (+0.03)
Points: 0.89 (+0.02)
15yr Fixed:
6.12% (−0.05)
Points: 0.59 (−0.06)
5/1 ARM:
6.09% (+0.12)
Points: 0.74 (+0.43)