U.S. Home Loan Volume Falls, Market Uncertain

The latest economic reports indicate a 9% decline in U.S. home loan volumes for the December quarter, with mortgage applications experiencing a 2% week-over-week decline driven by a 5% drop in refinancing applications. Despite this, purchase applications increased by 7% year-over-year due to lower FHA mortgage rates. Mortgage rates have slightly fallen due to a drop in the stock market, although they remain steady within a 6% to 7% range. The Federal Open Market Committee is expected to cut interest rates in 2025, which could lower mortgage rates further. Building permits decreased by 1.0%, signaling a potential slowdown in future construction activity and broader economic health. These factors highlight growing uncertainty in the housing market amid fluctuating economic conditions.