Money Street News
  • Please enable News ticker from the theme option Panel to display Post

Mortgage rates declined slightly, helping to spur a rush in new home loan applications, according to the Mortgage Bankers Association (MBA), after weeks of depressed activity in the housing market.

As of March 1, the 30-year fixed rate dropped a tad to 7.02 percent, which contributed to a nearly 10 percent jump in mortgage applications after recent declines as interest on home loans went up after declining to the mid-6 percent towards the end of last year and into 2024. Refinancing activity also rebounded, with the Refinance Index up 8 percent for the week.

Lenders said economic data on inflation coming in within expectation, suggesting that the Federal Reserve’s tightening of monetary policy which has pushed up borrowing costs for home loans is making progress on slowing prices. This development gives confidence that rate cuts may come at some point this year, with implications for the housing market.

“The latest data on inflation was not markedly better nor worse than expected, which was enough to bring mortgage rates down a bit,” Mike Fratantoni, MBA’s chief economist said in a statement.

The expectation is that buyers move with the trajectory of rates, as the market’s activity for the week ending March 1 illustrates.

“A small decline in mortgage rates last week led to a nearly 10 percent jump in mortgage applications, with refinance and purchase activity both posting solid gains,” MBA President and CEO Bob Broeksmit said in a statement shared with Newsweek. “Housing inventory remains tight and home prices are elevated, but first-time buyer interest is strong this spring.”

Applications were up for the first time in more than a month, according to Freddie Mac, which revealed on Thursday that its tracker found that the 30-year fixed rate mortgage averaged 6.88 percent as of March 7 down slightly from the previous week’s of 6.94 percent.

“Evidence that purchase demand remains sensitive to interest rate changes was on display this week, as applications rose for the first time in six weeks in response to lower rates,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Mortgage rates continue to be one of the biggest hurdles for potential homebuyers looking to enter the market.”

Housing economists say, as elevated as mortgage rates remain, buyers could find some savings in the market now compared to a year ago. More than 21 percent of homes listed for sale are priced between $200,000 and $350,000 in February 2024, an improvement from a year ago, according to

But high home loan costs will still be prohibitive for some buyers, said’s economist Jiayi Xu.

“While more affordable options are encouraging, the current high mortgage rate environment makes it less affordable than it could be, continuing to create barriers to homeownership,” she said in a note.

mortgage rates
In an aerial view, homes are seen in a residential neighborhood on September 15, 2022 in Pearland, Texas. Mortgage rates have declined a tad over the last week, which has spurred a jump in applications…

Brandon Bell/Getty Images