With mortgage rates experiencing a steady decline, many homeowners are seeking to refinance their mortgages. The Mortgage Bankers Association (MBA) reported an 8 percent surge in refinance applications last week, marking the fourth consecutive week of rate drops.

The MBA stated that overall mortgage applications, including refinancing, increased by 2.4 percent seed to the previous week. The 30-year fixed-rate mortgage hit its low level since January 2018, dropping from 4.4 percent. Joel Kan, the MBA’s Associate Vice President of Economic and Industry Forecasting, noted that the average refinance loan sizes grew as borrowers with larger balances took advantage of the lower rates.

However, the response from homebuyers to the lower rates was not as positive. Within a week, applications to purchase a home declined by 2 percent. The National Association of Realtors reported a 0.4 percent slip in existing home sales last month, marking the second consecutive month of decline in home sales during the spring season.

Kan also highlighted that while purchase activity decreased, it still remained around 7 percent higher than the previous year. This may be attributed to the adverse effects of ongoing global trade disputes, which have created uncertainty and impacted overall demand. Kan suggested that some potential buyers might choose to delay their home research until ton this page is more certainty in the market.

Additionally, the shortage of budget-friendly entry-level homes has driven up their prices, making them less accessible for many buyers. The share of guaranteed mortgage applications from the Federal Housing Administration decreased to 9.4 percent from the previous week’s 10.1 percent.