Market sees gains despite 23-year-high interest rate
Mortgage application volumes grew for the first time in five weeks despite interest rates hovering at record highs, according to the latest data from the Mortgage Bankers Association (MBA).
MBA's Market Composite Index edged up 2.3% from the previous week, when the 30-year fixed-rate mortgage averaged 7.31% – the highest since December 2000. Refinance and purchase application volumes both bounced back, up 3% and 2%, respectively.
"Treasury yields peaked early in the week and did move lower by the end, which may have spurred some activity," Joel Kan, MBA's deputy chief economist, said in a news release. "Mortgage applications for home purchases and refinances increased for the first time in five weeks but remained at low levels. Purchase applications increased but were still 27% lower than a year ago, as elevated mortgage rates and tight housing inventory continue to weigh on home-buying activity."
Read more: US mortgage rates hit new heights as economy defies expectations
Of total loan applications, the share of refi activity rose six basis points to 30.1%, while the adjustable-rate mortgage (ARM) application volume dropped to 7.5% of overall activity.
Find out who is a good candidate for an adjustable-rate mortgage in this article.
"The refinance market continues to be slow despite last week's gain, which was driven by a 7.9% spike in conventional refinances. Government refinance applications dropped more than 10% last week," Kan said.
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