Equifax signaled a glimmer of stability in a weak housing market, saying mortgage-related activity supported its second-quarter results as inquiry volumes fell less than feared. The credit reporting firm reported that mortgage inquiries declined 8% year over year in the quarter, beating its own outlook for an 11% slide, while the average 30-year mortgage rate sat below levels a year earlier when the Federal Reserve’s benchmark rate was at its peak.
Market backdrop: Slower housing, shifting rates
The U.S. housing market has cooled since the surge in borrowing costs that began in 2022. Home sales have been constrained by high prices, limited supply, and mortgage rates that remain elevated by historical standards. Rate moves still matter: even a modest retreat in the 30-year fixed rate can unlock refinancing checks, purchase pre-approvals, and lender shopping by buyers.
Equifax’s update comes after a year marked by tight monetary policy and limited refinancing. With the Fed holding rates high into 2024, affordability has remained strained, yet seasonal homebuying activity and incremental rate relief can nudge inquiry volumes off the lows.
What Equifax said
“Mortgage inquiries buoyed Equifax’s second-quarter results in an otherwise subdued mortgage market.”
“U.S. mortgage inquiries fell 8% in the quarter from a year earlier, better than Equifax’s expectation of an 11% decline.”
“The 30-year mortgage rate … [was] at lower levels than a year earlier when the Federal Reserve’s benchmark interest rate was at a record high.”
The company framed the smaller decline as a relative win in a quiet market, hinting that incremental rate relief supported consumer interest in home loans.
Why a smaller decline matters
Mortgage inquiries are an early signal. They precede loan applications and originations, and they feed revenue for credit bureaus through lender checks and verification services. An 8% drop instead of 11% suggests lenders and borrowers saw slightly better conditions than anticipated.
Even so, volumes remain down year over year, a reminder that affordability and inventory constraints still weigh on transactions. For investors and lenders, the spread between mortgage rates and the 10-year Treasury yield, inventory trends, and wage growth remain key swing factors for the second half of the year.
Industry impact and consumer effects
Lenders have trimmed capacity since the refinancing wave ended in 2022. A slower contraction in inquiries can help stabilize staffing and marketing budgets, especially for purchase-focused originators. It also offers a mild lift to vendors that support underwriting, title, and appraisal.
For consumers, slightly lower rates than last year can improve monthly payments, though the benefit varies by credit score and down payment. Many potential sellers remain locked into cheaper pandemic-era loans, limiting fresh listings. That keeps prices firm and blunts the impact of small rate declines on affordability.
- Lenders: A smaller drop in inquiries may steady application pipelines.
- Vendors: Credit and verification volumes track inquiry trends, aiding bureau revenue.
- Buyers: Rate dips help, but tight inventory and prices still pose hurdles.
Signals to watch next
Analysts will look for confirmation in purchase applications, refinancing share, and pull-through rates from inquiry to closing. Any Fed guidance that shifts rate expectations could change the picture quickly. Seasonal patterns into late summer often support activity, but the pace depends on mortgage spreads and listing supply.
Case studies from recent quarters show that when rates fall even by half a percentage point, refinancing checks can surge within weeks. If that pattern holds, third-quarter metrics could show steadier bureau volumes even without a broad housing rebound.
Equifax’s update paints a guarded but constructive picture. Inquiry volumes remain below last year, yet the shortfall is smaller than projected, and mortgage rates have eased from the prior peak. For housing and credit markets starved for momentum, that is a modest step in the right direction. The next test arrives with late-summer data and any change in Fed policy signals. A further dip in rates, firmer inventory, or improving wage growth would be the clearest signs that the inquiry trough is passing.
