Mortgage applications in the US decreased by 1.6% for the week ending 28 March 2025, compared to a prior decline of 2.0%. This drop was largely due to a reduction in refinancing activity despite a slight rise in purchase applications.
The market index fell to 243.6 from 247.5, while the purchase index increased to 158.2 from 155.8. The refinance index decreased to 710.4 from 752.4. The average rate for a 30-year mortgage remained stable at 6.70%, slightly down from 6.71% in the previous week.
Ongoing Weakness In Refinancing Demand
To put it plainly, the decrease in total mortgage applications, albeit milder than in the prior week, reflects a continuing reluctance by households to refinance at current borrowing costs. Although purchase activity showed modest improvement, applications for refinancing slipped further, which pulled down the overall index.
The market index — a combined measure of application volume — drifted lower, moving from 247.5 to 243.6. That’s a clear sign that demand for home loans remains subdued. The fundamental driver here is the relatively high mortgage rate, which has settled around 6.70% for a traditional 30-year loan. Even with that marginal tick down from 6.71%, it has failed to encourage any sort of recovery in refinancing.
These figures suggest that households have largely adjusted to the idea that lower mortgage costs aren’t arriving anytime soon. Rate-sensitive products like refinances are bearing the brunt of it. The uptick in purchase applications, rising from 155.8 to 158.2, may be more of a seasonal or opportunistic move rather than a response to broader optimism. On the other hand, refinancing demand dropped sharply again — now down to 710.4 from 752.4 — in a move that reinforces the idea that homeowners who needed or wanted to refinance have already done so, or are simply waiting out the rate plateau.
For us focused on macro signals and forward positioning, this slow grind presents less of a directional cue and more of a warning about underlying household borrowing sentiment. It’s worth noting that small fluctuations in headline interest rates no longer appear to have much influence on lending volumes. That, in turn, reduces the transmission effect of monetary policy through the housing channel in the short run.
Muted Borrower Response To Rate Changes
What matters now is how this soft performance within housing finance ties back into broader consumer activity. Rates may seem steady, but the persistent lack of enthusiasm from borrowers implies that we’re not on the verge of a spending rebound that would feed through into inflation or tighter labour conditions. We should, therefore, take the flattening of refinancing activity as one part of a larger set of behaviours showing the cooling effect of prior rate hikes.
Looking ahead to coming sessions, particularly in fixed-income and volatility markets, the lack of sensitivity among borrowers to small shifts in mortgage rates should be weighed closely. Especially if policy expectations drift based on consumer resilience — a sector not behaving as flexibly as some might predict. Supply in mortgage-backed securities should also be kept under tight watch, with these weekly data points feeding directly into prepayment risk assumptions. That will, in turn, inform hedging ratios across interest rate products.
These numbers may not prompt any repositioning straight away, but they do build up a growing argument for staying close to economic data, especially when it affects consumer credit flow. Small shifts in the housing market have narrowed in influence; a more meaningful driver may now come from employment or wage data, where pressure is mounting from both sides.
