Live Markets: Mortgage rates inch lower, but borrowers are unimpressed

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08/10/2025 16:01

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MORTGAGE RATES INCH LOWER, BUT BORROWERS ARE UNIMPRESSED

Welcome to day eight of the shutdown, during which secondary, also-ran economic indicators - due to a lack of competition from the dormant heavy hitters - are enjoying their moment in the spotlight.

Today, home loan demand data from the Mortgage Bankers Association (MBA) performed its solo act, providing market observers a look at the housing market.

The cost of financing home loans cooled down a bit last week, but not by enough to convince would-be borrowers to fill out loan applications, according to MBA's report.

The average 30-year fixed contract rate USMG=ECI shaved off 3 basis points to land at 6.43%.

Even so, demand for loans to purchase homes USMGPI=ECI - among the housing market's most leading indicators - dampened by 1.2%. But refi applications USMGR=ECI, suffered the worst of it, sliding 7.7%. Refinance demand accounted for 53.3% of total mortgage activity,

Combined, total mortgage demand dropped 4.7%.

"Refinance volume remains somewhat elevated relative to levels of a month ago," writes Mike Fratantoni, chief economist at MBA. "Purchase activity declined by about 1 percent for the week but continues to show moderate growth on an annual basis, and stronger growth for FHA (Federal Housing Administration) loans, favored by first-time homebuyers."

The 30-year fixed rate currently sits 7 basis points above where was it during the same week a year ago.

Over that same period, purchase applications have increased by 14.3%, while refi demand has spiked 28.2%.

While purchase applications are relatively forward-looking, all economic indicators are focused backward; today's MBA was compiled last week.

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 16.2% and 10.7%, respectively over the last twelve months. During that time, the S&P 500 .SPX has advanced 16.8%.

(Stephen Culp)

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EARLIER ON LIVE MARKETS

ROUNDHILL BETS ON MEME STOCKS, BRINGS BACK "MEME" ETF  CLICK HERE

FED MINUTES IN FOCUS AS US EQUITY MARKETS SET TO OPEN SLIGHTLY HIGHER CLICK HERE

BUBBLE TROUBLE? GOLDMAN SACHS SAYS NOT YET CLICK HERE

STERLING: LESS HEALTHY THAN IT LOOKS CLICK HERE

MORGAN STANLEY TURNS UP THE HEAT ON EUROPE'S MINING SECTOR CLICK HERE

STEELMAKERS GIVE A BOOST TO EUROPEAN STOCKS CLICK HERE

EUROPEAN FUTURES POINTS TO MUTED OPEN CLICK HERE

GOLD AT $4K - BE AFRAID, BE VERY AFRAID CLICK HERE

MKT_Snapshot_Oct 8 https://tmsnrt.rs/4oanYan

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

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