What started as an optimistic spring for mortgages has slowly turned grayer, forcing some borrowers back out of the once-welcoming market.
Applications for mortgages decreased 12.7% in the week ended April 18, according to the latest data from the Mortgage Bankers Association. It's the second consecutive week that borrower interest has waned.
The overall slide was largely driven by a 20% decrease in refinance applications, the data suggested. In fact, the share of applications for refinances slipped to its lowest level since January.
It's just the latest shift in consumer behavior in a volatile mortgage market.
"Economic uncertainty and rate volatility impacted prospective homebuyers," Joel Kan, the MBA’s vice president and deputy chief economist, said in a statement Wednesday.
In early April, when mortgage rates were hovering near monthslong lows, the number of borrowers refinancing surged to the highest level since September.
That quickly changed when mortgage rates reversed course as uncertainty plagued markets amid new economic policies, including a showdown on tariffs. In response, some homeowners and buyers retreated to the sidelines, while others opted for riskier adjustable-rate mortgages.
Now, it seems buyers are pulling back even more as persistent investor anxiety about the economy continues to bolster mortgage rates. As of Tuesday, the daily 30-year, fixed-rate mortgage was at 6.98%, and though it was unchanged from Monday, it was still nearing highs rarely seen since earlier this year, according to Mortgage News Daily.