It’s a familiar dynamic: Mortgage rates in the US fell, prompting an uptick in refis but no accompanying bump for purchase apps.

What does that tell you? I’ll answer my own question: It tells you that although people who were financially stable enough to buy a home at some point over the last two or three years are jumping at the opportunity to reduce their payments or, more likely, reduce the tenor of their loan, the rate relief’s not enough for aspiring homebuyers who need sub-6% rates, more supply and big price breaks to make the math work.

The average 30-year fixed fell to 6.17% over the week, Wednesday’s MBA update showed. That was the lowest in a month and the second-lowest since October of 2024.

And yet, as the figure shows, purchase activity not only slipped, the index matched its lowest levels since last summer (the left axis is inverted).

“Treasury yields ended [last] week lower as weaker data on retail sales and home sales outweighed better-than-expected readings on the job market for January,” MBA VP Joel Kan remarked, underscoring the discussion from this week’s macro preview.

Needless to say, part of the problem (a big part) is the down payment burden. In simple terms: Even if you have the income and the credit score, you might not have $70,000 in cash.

The latest Redfin data shows the typical down payment for a US home fell 1.5% in December to $64,000, the lowest in nearly a year. But as the figure shows, the median was just $32,000 on the eve of the pandemic. That increase — 100% — is prohibitive for a lot of American renters.

“Down payments may be falling in part because Americans are seeking out more affordable homes due to high prices, elevated mortgage rates and economic uncertainty,” Redfin’s principal economist Sheharyar Bokhari remarked.

Meanwhile, a separate Redfin release showed the share of all-cash buyers in the market is now less than 30%, the lowest since 2020, due in part to falling rates.

But if you have cash, you can almost name your price with sellers outnumbering buyers by the widest margin in at least a dozen years.

Indeed, a Redfin agent in Dallas said all-cash buyers can secure a discount of up 20% (!) currently. “The leverage buyers have when they pay in cash [right now] is unbelievable,” she marveled.