Mortgage, Refinance Applications Increase as Rates Ease

The 30-year fixed mortgage rate is now back down to levels observed in early April.

A townhouse for sale in Elkridge, Md., on Sept. 27, 2024. Madalina Vasiliu/The Epoch Times

Mortgage and refinance applications increased this past week as interest rates eased, stimulating housing activity amid growing economic uncertainty.

According to new data from the Mortgage Bankers Association released on May 7, mortgage applications surged 11 percent from the previous week for the week ending May 2. Refinance application volumes also rose by 11 percent and are up 51 percent from a year ago.

The increase in homebuying activity was driven partly by a tepid decline in mortgage rates.

The 30-year mortgage rate dropped 5 basis points to 6.84 percent this past week, its second straight weekly drop. This remained below the year’s peak of 7.18 percent.

Traditionally, the 30-year fixed mortgage rate tracks the yield on the benchmark 10-year Treasury security.

Despite volatility over the past several weeks, the U.S. Treasury market has stabilized, with the 10-year yield trading between 4.23 percent and 4.34 percent.

Mike Fratantoni, senior vice president and chief economist at the Mortgage Bankers Association, says recent national mortgage market data come as the United States wrestles with mixed economic signals.

“The economic news last week included a negative reading for first-quarter GDP growth and further signs of contraction in the manufacturing sector, mixed with a solid employment report for April,” Fratantoni said in a statement. “The net impact on mortgage rates was mostly downward but just back to levels from early April.”

In the first quarter, the U.S. economy contracted by 0.3 percent, driven by a sharp increase in imports and a modest decrease in government spending. Meanwhile, the U.S. labor market added a better-than-expected 177,000 new jobs in April.

Other daily and weekly measures indicate that the 30-year fixed mortgage rate has stayed below the 7 percent threshold.

Mortgage News Daily, for example, shows that the 30-year fixed-rate mortgage was 6.88 percent on May 6. Freddie Mac’s Primary Mortgage Market Survey highlighted another modest slide in the 30-year mortgage rate in the week ending on Thursday, May 1, falling to 6.76 percent.

Chen Zhao, an economist at Redfin, anticipates little change to mortgage rates.

“For the foreseeable future, until the uncertainty around tariff policy and associated economic impact resolves, mortgage rates are likely to hover in the high 6’s, close to 7%,” Zhao said in a note.

Spring Buying Season

The U.S. real estate market has been off to a strong start to the typically busy spring homebuying season.

In March, according to the Census Bureau, new home sales surged by 7.4 percent following an upwardly adjusted 3.1 percent in February.

The National Association of Realtors reported that pending home sales climbed by 6.1 percent in March, the largest monthly increase since December 2023.

“While contract signings are not a guarantee of eventual closings, the solid rise in pending home sales implies a sizable build-up of potential home buyers, fueled by ongoing job growth,” said Lawrence Yun, the National Association of Realtors’ chief economist.

Homes for sale sign in Maryland on Nov. 12, 2023. Madalina Vasiliu/The Epoch Times

Redfin figures show that the median sale price in March was $431,057, up by 2.5 percent from a year ago.

Despite better-than-expected home sales, consumer surveys suggest that homebuying intentions have dampened.

A recent Gallup poll found that 45 percent of non-homeowners do not expect to purchase a home for the foreseeable future. Affordability and lack of money for a down payment were the primary reasons.

Seventy-two percent said they view the U.S. housing market unfavorably.

Lisa Sturtevant, the chief economist at Bright MLS, says rising economic consternation and deteriorating consumer confidence “could lead to a slower-than-typical spring homebuying and selling season this year.”

“But the housing market—and homebuyers themselves—has been defying expectations for the last couple of years as demand remained strong even with elevated mortgage rates and record low affordability,” Sturtevant said in a note.

“So, it is possible we could see prospective homebuyers push through the uncertainty to take advantage of more inventory and lower mortgage rates, leading to stronger sales in the weeks ahead.”

Housing supply has improved this year, with inventory climbing to a post-pandemic high.

According to Realtor.com’s April 2025 Housing Market Trends Report, the inventory of homes for sale increased 30.6 percent year over year. This is the 18th straight month of supply growth.

Newly listed homes advanced more than 9 percent from a year ago.

“Despite this progress, active inventory remains 16.3% below typical 2017–19 levels, signaling that the market still has ground to cover. That said, April’s gains suggest the market is closing that gap more quickly than before,” the report stated.