Mixed Signals in the Mortgage Market: Interest Rates Drop, but Demand Slips

Despite a drop in interest rates, mortgage demand fell last week, according to the Mortgage Bankers Association. The average contract interest rate for 30-year fixed-rate mortgages decreased, but rates are still higher than pre-pandemic levels. Applications to refinance a home loan dropped 2%, while applications for a mortgage to purchase a home declined 1%. However, the Mortgage Bankers Association predicts a positive outlook for the market, expecting further declines in mortgage rates and modest growth in new and existing home sales in 2024.