Mortgage applications in the U.S. fell for a third consecutive week.
Applications across the country were down 3.9% for the week ending May 30, according to seasonally adjusted data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
For the week ending May 23, applications had gone down 1.2% from the prior week, and for the week ending May 16, the drop was 5.1%, according to the association’s seasonally adjusted data.
The decline comes as mortgage rates hover around 7% amid the financial market’s response to the economic uncertainty surrounding President Donald Trump’s ever-changing tariffs and other policies.
Joel Kan, the Mortgage Bankers Association’s vice president and deputy chief economist, said in a post that most mortgage rates have moved lower in the last week and have stayed between 6.8% to 7% since April.
“Mortgage applications decreased over the week but continue to exhibit annual gains, with purchase applications running 18% ahead of last year’s place,” Kan said, adding that loan refinancing activity is down “as potential borrowers hold out for larger rate drops.”
The Federal Home Loan Mortgage Corporation, better known as Freddie Mac, reported on May 29 that the weekly average 30-year fixed rate mortgage was at 6.89%, up 0.03 percentage points from the previous week. The average is set to be updated Thursday.
A daily mortgage rate index from Mortgage News Daily showed rates heading in a different direction, putting the average 30-year fixed rate mortgage at 6.87% on Wednesday, down 0.09 percentage points from Tuesday.
Zions Bank Mortgage Manager Jeremy Holmgren suggested it’s a tough time for the housing market.
“Affordability continues to be an issue as mortgage interest rates remain relatively high,” Holmgren said. “The majority of people purchasing homes are either first-time homebuyers or buyers needing affordable home loan financing options with low down payment requirements.”
Those types of buyers, “coupled with low inventory of homes for sale makes for a challenging purchase market which translates to low mortgage applications,” he said. “In Utah, we are seeing similar trends.”
Housing inventory has improved but is “still low, relatively speaking,” Holmgren said. A new report found the value of unsold properties nationwide has reached a record $700 billion, although starter homes priced for first-time buyers have long been in short supply.
Utah Gov. Spencer Cox recently pushed local officials to do more to help meet his goal of building 35,000 starter homes by the end of 2028. A program setting aside $300 million in public funds for loans to builders of starter homes is in the process of being expanded to include condos.