Live Markets: Home alone: MBA's solo act shows lower borrowing costs sparking refi demand

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22/10/2025 16:21

Updates with Mortgage Bankers Association data

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HOME ALONE: MBA'S SOLO ACT SHOWS LOWER BORROWING COSTS SPARKING REFI DEMAND

As investors settle into the new normal of government shutdown and the resulting scarcity of data, economic reports from secondary, non-government sources have become the only show in town.

As such, home loan demand data from the Mortgage Bankers Association (MBA) is the only item on Wednesday's menu.

The cost of financing home loans cooled down a bit last week, but not by enough to entice would-be home buyers from the sidelines, according to MBA's report.

The average 30-year fixed contract rate USMG=ECI shaved off 5 basis points to land at 6.37%.

Even so, demand for loans to purchase homes USMGPI=ECI - among the housing market's most leading indicators - dampened by 5.2%. On the other hand, cooler borrowing costs prompted a 4.0% increase in refi applications USMGR=ECI, which accounted for 55.9% of total mortgage activity,

Combined, total mortgage demand inched 0.3% lower.

"The lowest mortgage rates in a month spurred an increase in refinance activity,” said Joel Kan, MBA’s deputy chief economist. “Borrowers remain attentive to these opportunities to lower their monthly mortgage payment. "

The 30-year fixed rate currently sits 15 basis points below where it was during the same week a year ago.

Over that same period, purchase applications have increased by 19.8%, while refi demand has spiked 80.6%.

While purchase applications are relatively forward-looking, all economic indicators are focused backward.

Housing stocks, on the other hand, reflect where investors expect the sector to be six months to a year down the road.

With that in mind, investors seem to foresee leaky roofs and termites. The S&P 1500 Homebuilding index .SPCOMHOME and the Philadelphia SE Housing index .HGX - have woefully underperformed the broader market, having dropped 11.7% and 8.6%, respectively over the last twelve months. During that time, the S&P 500 .SPX has advanced 15.1%.

(Stephen Culp)

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Wall Street edges into the red https://fingfx.thomsonreuters.com/gfx/mkt/egpbqzlxqvq/Pasted%20image%201761142533115.png

MBA https://www.reuters.com/graphics/USA-STOCKS/dwpklojmyvm/mba.png

Housing stocks https://www.reuters.com/graphics/USA-STOCKS/akpexdnlmvr/hgx.png