US MBA mortgage applications for the week ending March 21 experienced a decline of 2.0%, following a prior decrease of 6.2%. The Mortgage Bankers Association’s market index is now at 247.5, down from 252.5.
The purchase index saw a slight increase to 155.8 from 154.7, whereas the refinance index fell to 752.4 from 794.4. The 30-year mortgage rate remained fairly steady at 6.71%, compared to 6.72% the previous week. The decline in applications is attributed to a reduction in refinancing activities, although there was a minor uptick in purchase activity.
Changing Borrower Behaviour
This data provides a clear indication of changing borrower behaviour. Refinancing activity has continued its downward trend, suggesting that homeowners are less inclined to restructure their loans despite relatively stable mortgage rates. Some will point to the marginal rise in new purchase applications as a sign of resilience, but it has not been enough to counter the broader reduction in mortgage activity.
With the market index now at 247.5, a five-point drop from the prior reading, it is clear that demand is retreating from previous levels. The latest figures mark the second consecutive weekly decline, reinforcing the idea that refinancing momentum is fading. Given that broader economic forces remain in play, this shift is unlikely to be ignored. Loan originators and lenders have responded by maintaining rates near prior levels, with the average 30-year mortgage rate remaining almost unchanged at 6.71%. While this might create some stability on the borrowing front, the real driver of activity appears to be borrower sentiment rather than any marginal adjustments in rates.
Looking ahead, it is not just mortgage markets that should be considered. Mortgage trends like these have an effect well beyond property markets, especially in rate-sensitive sectors. This decline in applications suggests that many borrowers are reluctant to commit to refinancing under existing conditions. If purchase activity does not strengthen meaningfully, it could underscore broader hesitations among those seeking property loans.
Impact On Lending Institutions
The refinance index provides the clearest evidence of hesitancy. With a drop from 794.4 to 752.4, the reduction follows a steeper decline of 6.2% in the previous week. A continuation of this trend could pressure lending institutions that rely on refinancing demand. Purchase applications, however, have edged up slightly, offering some counterbalance. With the purchase index rising from 154.7 to 155.8, there is at least some indication that demand for property loans remains active.
The current environment remains highly sensitive to rate expectations and broader financial conditions. If economic data influences interest rate sentiment, borrowing trends are likely to shift. Market participants should be attentive to how these figures align with monetary policy expectations, as the effects will ripple beyond mortgage markets alone.
