US mortgage applications hit the lowest point since 1996 with 2.9% decrease

Posted on September 11, 2023   |  

Following a series of notable increases, mortgage interest rates eased slightly last week, but failed to stimulate mortgage demand.

Mortgage application volume recorded a 2.9% decline compared to the previous week.

For 30-year fixed-rate mortgages, the average contract interest rate dropped from 7.31% to 7.21%. Points also decreased from 0.73 to 0.69 (inclusive of the origination fee) for loans featuring a 20% down payment.

Despite the decline in mortgage rates, applications reached their lowest point since December 1996, as rates remained significantly higher than a year ago. 

Applications for refinancing home loans, which are particularly sensitive to weekly interest rate changes, fell by 5% compared to the previous week and declined by 30% compared to the same period one year ago.

Borrowers, despite holding substantial home equity, appear more inclined to opt for a second loan to access cash rather than risk losing their low interest rates through a cash-out refinance.