Thanks to positive economic data, mortgage rates cooled and mortgage applications rose from a week prior.
For the week that ended July 14, mortgage applications rose 1.1% from the prior week, according to data from the Mortgage Bankers Association.
“Mortgage rates declined last week, as markets responded positively to incoming data showing that U.S. inflation continues to cool. Most rates in our survey declined, with the 30-year fixed rate falling to 6.87%,” said Joel Kan, MBA’s vice president and deputy chief economist. “Refinance applications increased more than 7%, but that activity accounted for only 28% of applications and was more than 30% behind last year’s pace. Despite last week’s lower rates, purchase applications decreased, as home purchase activity is still being held back by low housing supply and rates that are still much higher than a year ago.”
Last week, mortgage rates finally decreased with the 30-year fixed rate falling to 6.87% from 7.07%, per the MBA’s data. The MBA data showed that for jumbo loan balances (greater than $726,200), the rate jumped to 6.89% from 7.04% last week.
At Mortgage News Daily, 30-year fixed-rate mortgage rates were 1 basis point higher on Wednesday morning, at 6.88%. At HousingWire’s Mortgage Rates Center, Optimal Blue had rates at 6.74% on Wednesday morning.
The MBA said purchase applications decreased, with the purchase index falling by 1% from one week earlier and was 21% lower than last year’s level on an unadjusted seasonal basis. A lack of housing inventory and relatively high mortgage rates slowed down purchase applications. Refinancing applications, on the other hand, increased 7% last week compared to the previous week and were 32% lower than the same week one year ago. However, that activity accounted for only 28% of applications, up from 26.8% last week.
The Federal Housing Administration loans’ share increased to 13.6% from 13.3% the week prior. The U.S. Department of Veteran Affairs loans’ share decreased to 12.1% from 12.6% the week prior. And the U.S. Department of Agriculture loans’ share increased to 0.5% from 0.4% the week prior.
Adjustable-rate mortgages decreased to 6.3% of total loan applications last week. The average contract interest rate for 5/1 ARMs rose to 6.27% from 6.24% a week prior.
