A “For Sale” sign prominently displayed outside a property in Miami, Florida, signals the ongoing fluctuations in the housing market as of April 16, 2025.

Current Market Trends

Recent economic shifts, particularly higher interest rates and concerns regarding the economic landscape, have resulted in a marked decrease in mortgage demand. According to the Mortgage Bankers Association (MBA), total mortgage application volume plummeted by 12.7% from the previous week, as indicated by their seasonally adjusted index.

Interest Rates on the Rise

The average contract interest rate for 30-year fixed-rate mortgages with conforming balances of $806,500 or less rose to 6.90%, up from 6.81% the week before. Additionally, points increased from 0.62 to 0.66, factoring in the origination fee for loans with a 20% down payment. This marks the highest rate in two months, although it remains 34 basis points lower than the same week last year. Notably, rates have surged by nearly 30 basis points over just two weeks.

Impact on Refinances and Purchases

The uptick in interest rates has significantly impacted the refinancing market, which saw a sharp 20% decline in applications for the week. Nonetheless, this volume is still 43% higher than the corresponding week a year ago. The refinance share of total mortgage activity fell to 37.3%, down from 41.3% previously.

On the purchase front, mortgage applications dipped by 7% weekly, resulting in a mere 6% increase year-on-year. Homebuyers are facing challenges beyond rising interest rates; persistent home price increases and recent volatility in the stock market have made many hesitant to liquidate stocks for down payments.

Expert Insights

Joel Kan, vice president and deputy chief economist at the MBA, noted, “Similar to the previous week, economic uncertainty and rate volatility impacted prospective homebuyers.”

Market Reactions

Interest rates experienced fluctuations earlier this week. After a rise on Monday, the rates stabilized on Tuesday, as observed by Mortgage News Daily. Matthew Graham, COO at Mortgage News Daily, remarked, “Headlines regarding Trump’s comments about Fed Chair Powell rattled the market and sent rates lurching higher. Now, 24 hours later, an absence of any additional escalation has given way to calmer market movement and generally flat interest rates.”