Total mortgage application volume surged nearly 16% compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) dropped to 7.02% last week from 7.07%.
Refinance applications jumped 28% last week. A new home was marked sold at Pintail Commons by Landsea Homes in Johnstown, Colorado, on June 10, 2024. RJ Sangosti | MediaNews Group | Denver Post | Getty Images.
The drop in mortgage rates early last week spurred a significant increase in mortgage application volume. However, a stronger-than-expected monthly employment report on Friday caused rates to rise again.
Throughout the week, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 7.02% from 7.07%. Despite lower rates earlier in the week, Friday’s employment report led to a 12 basis point jump, according to Mortgage News Daily.
Refinance applications, which are highly sensitive to interest rate changes, soared 28% last week and were also 28% higher than the same week a year ago. “Lower rates earlier in the week meant a strong increase in refinance activity, particularly for VA borrowers, who jumped on the chance to lower their rates,” said Mike Fratantoni, senior vice president and chief economist at the MBA.
Mortgage applications to purchase a home increased by 9% for the week, though they remain 12% lower than the same week last year. Homebuyers are facing high interest rates, high home prices, and lean inventory. A monthly survey from Fannie Mae found that 86% of consumers believe now is a bad time to buy a home.
“Multiple data sources indicate that home inventory levels, while still historically low, are significantly up from last year. This is good news for many prospective homebuyers who have been frustrated by the lack of homes on the market,” Fratantoni noted.
Mortgage rates remained relatively stable at the start of this week as investors await the monthly inflation report, the consumer price index, and the outcome of the Federal Reserve meeting on Wednesday. “The Fed will neither cut nor hike rates, but they’ll update their outlook for the rest of the year,” wrote Matthew Graham of Mortgage News Daily. “CPI is the most important event of the day, but the Fed’s interpretation could either accelerate or counter the morning’s momentum. Either way, volatility is likely.”
Now is a crucial time for prospective homebuyers to start looking for their dream home. With mortgage rates experiencing fluctuations and inventory levels rising, it’s an opportune moment to take advantage of the market conditions. Start your home buying journey today and find the perfect place to call home.