Mortgage applications to buy a home decreased by 0.1% for the week and were 36% lower than the same week one year ago. This is the slowest time of the year for housing, and while rates are lower than they were a month ago, they are still more than twice what they were a year ago.

“The latest data on the housing market show that homebuilders are pulling back the pace of new construction in response to low levels of traffic, and we expect this weakness in demand will persist in 2023, as the U.S. is likely to enter a recession,” said Mike Fratantoni, MBA’s chief economist. “However, if mortgage rates continue to trend down, as we are forecasting, more buyers are likely to return to the market later in the year, as affordability improves with both lower rates and slower home-price growth.”

But rates started the week higher and continued to increase sharply Tuesday, after the Bank of Japan surprised global markets by changing its monetary policy. 

“This isn’t the sort of thing that’s likely to have an ongoing impact on US rates in the short term,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “Moreover, the impact was bigger than it otherwise would have been due to the time of year.”

Rates are now close to 25 basis points higher than they were last week Thursday.