They rise to the highest level of activity since early May
A surge in purchase applications drove mortgage demand for the week ending June 23, according to the Mortgage Bankers Association.
MBA’s weekly survey showed a 3% seasonally adjusted increase in mortgage loan application volume. However, applications were down 8% from the previous week on an unadjusted basis.
MBA deputy chief economist Joel Kan noted that mortgage rates, one of the driving forces behind application activity, varied across loan types last week, with the 30-year fixed rate increasing slightly to 6.75%.
“The spread between the jumbo and conforming rates widened to 16 basis points, the third week in a row that the jumbo rate was higher than the conforming rate,” Kan said. “To put this into perspective, from May 2022 to May 2023, the jumbo rate averaged around 30 basis points less than the conforming rate.”
Both refinance and purchase loan applications rose 3% week over week, data from MBA’s survey revealed.
“Purchase applications increased for the third consecutive week to the highest level of activity since early May but remained more than 20% lower than year-ago levels,” Kan said. “New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market. Existing-home sales continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages.”
“The ‘lock-in effect,’ in which existing owners are disincentivized to list their homes due to not wanting to give up a mortgage rate much lower than current market rates, continues to suppress the number of listings,” Fannie Mae chief economist Doug Duncan commented. “Therefore, homebuyers have increasingly turned toward new homes, which is consistent with the recent firming in home price growth and homebuilder optimism over the past few months.”
New single-family home sales, the Census Bureau reported, spiked 12.2% in May to a seasonally adjusted annualized rate of 763,000, the highest level since February 2022.
Want to keep up with the latest mortgage news? Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
