Lower mortgage rates driving housing demand

Mortgage rates have recently reached a year-to-date low, so the question is: has that already impacted the purchase application data? The answer is yes, it has if you look closely.

Overall, purchase application data has been positive for most of the year, particularly when comparing year-over-year results. However, now these lower mortgage rates have also boosted the weekly data, aligning with the year-over-year growth we have seen for most of the year. 

Since late 2022, when mortgage rates dipped below 6.64% and approached 6%, housing demand tends to increase. However, we have not been able to maintain this mortgage rate range for an extended period. Let’s take a look at the data and see what we can discover.

Purchase apps show 25% year-over-year growth

The latest data shows:

• +2% week to week
• +25% year over year

The weekly data in 2025 so far:

• 16 positive weeks
• 11 negative weeks
• 6 flat prints

The yearly data:

• 30 straight weeks of positive year-over-year data
• 17 consecutive weeks of double-digit growth year over year

The year-over-year growth in purchase application data has looked impressive this year; however, this is more of a function of our new listings data growing year over year. Since the majority of home sellers are also homebuyers, they tend to fill out a purchase application before selling their home.

In 2025, we’ve had a three-year high in new listings, which has allowed the year-over-year data with purchase apps to grow. We must be mindful that 2023 and 2024 were the two lowest years for new listings in history, so we are working from an extremely low bar. Additionally, the 2025 data didn’t return to the normal levels we would have seen in the pre-COVID era, but we did experience growth this year.

If we weren’t working from a historic low in purchase apps and the second-lowest new listings ever in 2024, the year-over-year growth this year wouldn’t be as striking. However, if you look closely at the chart below, you can see the trend over the last four weeks has been positive.

Week-to-week growth is now positive

Over the past four weeks, we have observed positive data both on a week-to-week basis and year-over-year. While we nearly experienced a similar trend in March, it has now developed into a legitimate pattern, with mortgage rates falling below 6.64%.

One aspect that we haven’t consistently seen this year was positive week-to-week purchase application data; we often received encouraging reports followed by negative ones, along with some that remained flat. Last year, during 18 weeks when mortgage rates approached 6%, we recorded 12 positive weeks, 5 negative weeks, and 1 flat week.

This is the trend I want to see if we are to move mortgage rates closer to 6%. For now, this is a good start.

Conclusion

I need to see at least 12 to 14 weeks of positive, forward-looking housing data before I can feel optimistic about the potential for a few hundred thousand additional home sales this year. We’ve observed similar patterns over the past few years when mortgage rates approached 6%. However, it’s encouraging to see that when rates dipped below 6.64%, we experienced four consecutive weeks of positive data — both week-to-week and year-over-year. Although it’s not yet the 12 to 14 weeks of data that I’m looking for, it’s a promising start.