WASHINGTON — U.S. mortgage applications increased for the first time in nearly two months as a modest decline in borrowing costs drew some prospective homebuyers back into the market, according to data released Wednesday by the Mortgage Bankers Association.
Applications rose 3.4% on a seasonally adjusted basis during the week ending Oct. 23, the association reported. It was the first weekly increase since Sept. 2, although applications remained 18% below their level a year earlier, MBA Vice President and Deputy Chief Economist Joel Kan said.
Kan attributed the rebound in part to a recent decline in mortgage rates, which provided borrowers some relief, particularly those seeking conventional loans. But he cautioned that rates remain more than a percentage point above year-earlier levels, while many existing homeowners have mortgages carrying rates well below those currently available.
Those conditions are also encouraging more borrowers to consider adjustable-rate mortgages, Kan said, according to the MBA survey.
Rates Remain Elevated
Freddie Mac reported that the average rate on a 30-year fixed mortgage fell to 7.32% last Thursday from 7.4%, a three-year high, according to reporting by the Deseret News. The daily measure maintained by Mortgage News Daily, however, edged up to 7.35% Wednesday from 7.33%. Earlier in October, that index reached 7.6% amid a bond market sell-off, the Deseret News reported.
Mortgage rates are influenced more directly by yields on longer-term Treasury securities than by the Federal Reserve’s benchmark short-term interest rate. The Fed held its benchmark rate steady Wednesday following an earlier increase, with another rise possible in December, according to the Deseret News.
Economic Uncertainty Weighs on Housing
The Deseret News also cited uncertainty tied to the U.S.-Israeli war against Iran, which began in late February, as a factor affecting financial markets and household costs. Before the conflict, mortgage rates had briefly fallen below 6% for the first time since 2022, the publication reported.
The latest application figures suggest some borrowers are responding to even modest rate relief, but elevated financing costs continue to constrain housing demand.
