The 30-year fixed mortgage rate also rose to 3.18% — the highest level in a month, according to the MBA. Purchase activity was higher for the third straight week, according to Joel Kan, MBA’s vice president of economic and industry forecasting.
“Despite the jump in rates, refinances also increased for the second consecutive week, pushed higher by a 4% bump in conventional refinance applications,” Kan said, “Government purchase applications drove most of last week’s increase, which also contributed to a slightly lower overall average purchase loan size.”
U.S. inflation jumped from 1.68% in February all the way up above 5% by June, per last week’s PMMS report from Freddie Mac. If the fed were to tighten policy, Fannie Mae’s ESR Group expects this to drag on upcoming housing market growth and even stifle home sales, house prices, construction and mortgage originations.
“While mortgage rates are low, purchase demand has weakened over the last couple of months, primarily due to affordability constraints stemming from high home prices,” Sam Khater, Freddie Mac’s chief economist. “With inventory tight, the slowdown in demand has yet to impact prices, meaning the summer will likely remain a strong seller’s market.”
The refinance share of activity increased to 62.5% of total mortgage applications from 61.7% the previous week. On an unadjusted basis, the market composite index increased 1% compared with the previous week. However, the seasonally adjusted purchase index decreased 1% from one week earlier.
The FHA share of total mortgage applications decreased to 9.5% from 9.6% the week prior, and the VA share of total mortgage applications also decreased to 11.2% from 11.5%.
Here is a more detailed breakdown of this week’s mortgage applications data:
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.18% from 3.11%
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.26% from 3.20%
- The average contract interest rate for 30-year fixed-rate mortgages increased to 3.21% from 3.14%
- The average contract interest rate for 15-year fixed-rate mortgages increased to 2.58% from 2.49%
- The average contract interest rate for 5/1 ARMs remained unchanged at 2.69%, with points increasing to 0.39 from 0.25 (including the origination fee) for 80% LTV loans
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