On June 1, 2024, a sales sign appears in front of a home in Patchigue, New York.
Steve Pfost | Newsday | Getty Images
A short drop in interest rates has led to a strong conflict with demand for otherwise lukewarm mortgages. According to the Mortgage Bankers Association’s Seasonally Adjusted Index, the total mortgage application volume has increased by 9.4% compared to last week. Last week’s results included adjustments to the July 4th holiday.
The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balances fell from 6.79% to 6.77%, below $806,500, and held stable points at 0.62 including the origin fee for a 20% down payment loan. That was the lowest level in three months.
Mortgage refinance applications increased 9% in a week, 56% higher than the same week a year ago. Refinance demand is particularly weak as mortgage rates have been stuck at high levels for a long time.
Applications to buy mortgage homes also increased by 9% for the week, 25% higher than the same week a year ago.
“We’re committed to providing a great opportunity to help you,” said Joel Kang, vice president and vice-chief economist at MBA. “The average loan size for a $432,600 purchase application was the lowest since January 2025.”
The buying of mortgage demand has historically flowed quite closely with actual home sales, but there are many unusual factors in today’s market. Consumer sentiment is unstable, and contract cancellation rates are high in both new and existing homes. So far, pending sales representing signed contracts have not risen along with demand for mortgages.
Mortgage News Daily has shown that mortgage rates have started to rise again just before the July 4th holiday, and have risen again this week so far. However, it may not be a sign of stronger movement.
“We often tend to see slightly active movements in the opposite direction after experiencing consistent trends in other directions. June was definitely that trend, and we received our rates to their lowest levels in a few months.” “We still have the lowest rates today since late April, aside from the last days of June.”
