“The balance of power in the US housing market has shifted toward buyers, but a lot of sellers have yet to see or accept the writing on the wall. Many are still holding out hope that their home is the exception and will fetch top dollar,” Khan said. “But as sellers see their homes sit longer on the market and notice fewer buyers coming through on tour, more of them will realize that the market has adjusted and reset their expectations accordingly.”
Lower applications could make for tough May
While the market saw an increase in mortgage applications in late April and early May, the trend reversed as the month continued.
The Mortgage Bankers Association (MBA) reported mortgage application declines on Wednesday for the second straight week.
In the week of May 23, applications fell 1.2% from the previous week. Refinances were down as rates spiked to near 7% on average. Purchases did increase slightly, thanks to the surge in housing inventory outweighing the high interest rates.
Moody’s US credit downgrade and proposed tax cuts could mean higher borrowing costs, says Odeta Kushi, Deputy Chief Economist at First American. The mortgage market faces challenges from economic turmoil. https://t.co/OdKbGhPQbw
— Mortgage Professional America Magazine (@MPAMagazineUS) May 27, 2025
Bob Broeksmit, MBA president and CEO, noted the encouraging news in the purchase market despite the application decline.
