Rising mortgage rates continue to dampen demand for mortgage applications, marking the second consecutive week of decline, according to the latest data from the Mortgage Bankers Association (MBA).
By the Numbers:
- Total demand for mortgage applications fell by 5.2%.
- Purchase demand decreased by 4.4%, reaching its lowest point since February.
- Refinance demand saw a 6.8% drop, also hitting its lowest level since late February.
- Refinance share of mortgage activity slightly decreased to 31.1%.
Interest Rates: The average contract interest rate for a 30-year fixed-rate mortgage rose to 7.07%, a two-basis point increase from the prior week and the second straight weekly rise.
What They’re Saying: Mike Fratantoni, MBA’s Chief Economist, noted that government loan products saw the smallest decline which was “helped by growth in VA applications. The market is relying on first-time homebuyer demand, and many first-time buyers do use government lending programs.”
Silver Lining: Mortgage demand is a lagging report. This report covers the week ending May 31st. Bonds have seen a decent rally since then with the 10-year yield falling 25 basis points in the last week. With rates falling, hopefully next week’s report shows us a decent rise in demand.