Fewer Americans are taking advantage of low mortgage rates.
Mortgage applications decreased 2.5% from one week earlier, according to the most recent data from the Mortgage Bankers Association’s Weekly Mortgage Application Survey for the week ending April, 23.
The drop in prospective home buyers comes despite the interest rate for 30-year fixed-rate mortgages ($548,250 or less) decreasing to 3.17% from 3.20% for the third week in a row. And applications to refinance a home decreased by 1%, that's 18% lower than they were during the same time period one year ago, the data shows.
"Even with a few weeks of low rates, most borrowers have likely already refinanced, which is why activity has decreased in the seven of the last eight weeks," Joel Kan, associate vice president of economic and industry forecasting for the Mortgage Bankers Association said.
Kan noted the recent dip in the purchase market comes amid increasing home prices and low inventory. The median sales price of new houses sold in March 2021 was $330,800, and the average sales price was $397,800, up from an average of $346,400 in January, Census Bureau data shows.
And with scarce inventory, homeowners are bidding over the asking prices in the competitive market, dropping contingencies for home inspections and appraisals, and moving up closing dates up to a one-month time period to stay competitive.