However, application activity is down significantly on an unadjusted basis
Mortgage loan applications ticked up despite the US economy putting out mixed signals, according to the Mortgage Bankers Association (MBA).
MBA’s latest survey showed that mortgage applications were up 0.9% for the week ending July 7 (adjusted for the observance of Independence Day). However, applications plunged 19% on a seasonally unadjusted basis from the previous week.
“Incoming economic data continue to send mixed signals about the economy, with the overall impact leaving Treasury yields higher last week as markets expect that the Federal Reserve will need to hold rates higher for longer to slow inflation,” said MBA deputy chief economist Joel Kan.
All mortgage rates in MBA’s survey followed suit, with the 30-year fixed rate surging to 7.07% – the highest level since November 2022. The average contract interest rate for jumbo loans also rose to 7.04%, a record high for the jumbo series, which dates to 2011.
Refinance applications slipped 1% week over week, and purchase applications dropped 2% on a seasonally adjusted basis and were down 19% when unadjusted.
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“Purchase applications increased but remained at a very low level and are 26% lower than the same week last year,” Kan said. “The rise in purchase activity was driven by increases in both FHA and V.A. purchase applications. The refinance index dropped to its lowest level since early June, as demand for rate/term and cash-out refinances remains extremely low with mortgage rates over 7%.”
Of total applications, the refinance share of mortgage activity decreased to 26.8% from 27.4% the previous week. The FHA share of total applications increased three basis points to 13.3%, and the V.A. share of total applications increased nine basis points to 12.6% from the week prior.
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