After two weeks of declining mortgage rates, an increase this past week along with renewed concerns of tariff impacts deflated home purchase applications by a notable 10%.
According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending July 11, the Market Composite Index (a measure of mortgage loan application volume) decreased 10.0% from the previous week’s 6.67% decrease. On an unadjusted basis, the Index increased 13% compared with the previous week.
“Treasury yields finished higher last week on average despite an intra-week drop, driven partly by renewed concerns of the impact of tariffs on the economy. As a result, mortgage rates rose after two weeks of declines, which contributed to slower application activity,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Jumbo rates were lower than conventional rates for the third straight week, as some depositories may be positioning themselves for growth in balance sheet lending.”
MBA also reported that the Refinance Index decreased 7% from the previous week and was 25% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 12% from one week earlier. The unadjusted Purchase Index increased 11% compared with the previous week and was 13% higher than the same week one year ago.
The refinance share of mortgage activity increased to 41.1% of total applications from 40.0% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.1% of total applications.
Added Kan, “Purchase applications remained sensitive to both the uncertain economic outlook and the volatility in rates and declined to the slowest pace since May. Refinance applications also dipped because of higher rates, with refinance applications falling, led by VA refinances partially reversing their previous week’s gain, dropping 22 percent.”
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