However, Kan explained that the stability in rates hasn’t been enough to overcome the challenges posed by limited housing supply and high home prices, which continue to put a damper on the activity of home purchases.
“Applications decreased compared to a holiday-adjusted week, driven by a decline in purchase applications that offset a slight increase in refinance activity,” he said.
Amid these fluctuations, MBA’s refinance index climbed 2% from the previous week and, interestingly, 3% higher than last year. The seasonally adjusted purchase index fell 11% week over week. Unadjusted purchase applications saw a 6% increase but remained 20% lower than the same week a year ago.
“Low existing housing supply is limiting options for prospective buyers and is keeping home-price growth elevated, resulting in a one-two punch that continues to constrain home purchase activity,” Kan added. “The average loan size for purchase applications has picked up in recent weeks to $444,100, the largest average loan size since May 2022.”
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Source: mpamag.com