Mortgage Demand Down As Buyers Remain On Strike

[Michael Carbonare]

M𝐨𝐫𝐭𝐠𝐚𝐠𝐞 𝐝𝐞𝐦𝐚𝐧𝐝 𝐭𝐨 𝐛𝐮𝐲 𝐡𝐨𝐮𝐬𝐞𝐬 𝐣𝐮𝐬𝐭 𝐩𝐥𝐮𝐦𝐦𝐞𝐭𝐞𝐝 𝐭𝐨 𝐢𝐭𝐬 𝐥𝐨𝐰𝐞𝐬𝐭 𝐥𝐞𝐯𝐞𝐥 𝐢𝐧 𝟏𝟎 𝐦𝐨𝐧𝐭𝐡𝐬 𝐚𝐬 𝐭𝐡𝐞 𝐛𝐮𝐲𝐞𝐫'𝐬 𝐬𝐭𝐫𝐢𝐤𝐞 𝐜𝐨𝐧𝐭𝐢𝐧𝐮𝐞𝐬.
The MBA mortgage purchase index is now at 150.
57% crash from pandemic peak.
40% drop from 2018-2019 levels.

𝑇ℎ𝑒 𝐺𝑟𝑒𝑎𝑡 𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 𝑜𝑓 2026 is not happening.  In fact, this could be the worst year for sales if current trends continue at this pace.

And its not just mortgage applications.  It's also home tours.  Data from ShowingTime, a Zillow-owned home tour scheduling app, is showing the worst start to a year in 5 years for touring volume in 2026.  Mortgage applications and home tours are leading indicators of demand.

Most concerning about the continuing plummeting demand is that it's happening alongside interest rate cuts and declining mortgage rates. Fed has cut rates 7 times since August 2024.  Yet demand keeps falling.  It ain't rates.
Leading me to say once again, in my best James Carville voice,  "It's the price, stupid".

[Theresa Harris]

We're two months into the year.  You also have to think about interest rates and what people incorrectly think is normal (2.5% interest is not normal).  Where I live, entry level houses are still selling quickly.  Ones that are higher end are taking a bit longer to sell.  Where I have some of my rentals (another province), prices there are down a bit along with sales.