Mortgage Demand on the Rise Amid Increased Housing Supply
On May 12, 2025, a noticeable shift in the housing market was observed, particularly in Miami, Florida, where a For Sale sign marked the increasing opportunities for homebuyers.
Increasing Mortgage Applications
Recent data from the Mortgage Bankers Association (MBA) indicates a 1.1% increase in total mortgage application volume week-over-week. This uptick signals a renewed interest among homebuyers, driven largely by a growing inventory of houses for sale, which appears to outweigh concerns stemming from economic uncertainties and rising tariffs.
Interest Rates and Their Impact
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances—capped at $806,500—rose slightly to 6.86%, up from 6.84%. The points remained steady at 0.68 for loans with a 20% down payment, reflecting a 22 basis point increase compared to the same week last year.
Insights from Recent Data
Applications to secure loans for home purchases climbed by 2% last week alone, marking an impressive 18% year-over-year increase. This recovery follows a substantial drop in demand during most of April, where a previous rising trend was noted at 11% the week before.
“The news for the week was the growth in purchase applications,” said Michael Fratantoni, chief economist for the MBA. “Despite the economic uncertainty, the increase in home inventory means there are additional properties to buy, unlike the last two years, and this supply is supporting more transactions.”
Government Loan Applications Surge
A significant rise in government purchase applications was recorded, increasing by nearly 5% compared to the previous week and up 40% year-over-year. Government loans are typically favored by lower-income and first-time homebuyers due to their favorable low down payment options.
Current Housing Market Landscape
Nationally, the total number of active listings has increased by approximately 14% compared to the same time last year, with new listings rising by 5.5%.
Refinancing Trends
Meanwhile, refinance applications saw a decline of 0.4% last week. However, they remain significantly elevated, being up 44% from the same week a year prior. The refinancing activity now constitutes 36.4% of total applications, a slight decrease from the previous week’s share of 37.1%.
Conclusion
The current trends in mortgage applications and housing inventory suggest a dynamic housing market. As buyers respond to increasing listings and potential opportunities, industry experts project continued interest despite lingering economic uncertainties.