Mortgage applications ticked up slightly last week, buoyed by a refi boost as purchase applications tanked in the face of 7% rates.
The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — increased by 0.1%, following the week prior’s 0.6% slip.
Adjusted purchase applications fell by 5%, while the unadjusted index was down 4% and 23% lower YOY.
Rates took a turn upward in the face of a surprisingly strong unemployment report and continued inflation stickiness, rising to 7.01%, their highest point in more than a month.
“Mortgage rates moved higher last week as several Federal Reserve officials reiterated a patient posture on rate cuts. Inflation remains stubbornly above the Fed’s target, and the broader economy continues to show resiliency,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.
Refinances were up 10% from the week prior and 4% YOY, however, with VA refis leading the pack. They accounted for 33.3% of applications. In the past decade, they averaged 58% of all activity.
Home sales rebounded recently as the spring homebuying season began, but affordability pressures have depressed predictions for the coming months.
Some analysts have suggested that buyers are getting used to the high rate environment and re-entering the market. That may be for buyers who have been ready and waiting to see if rates drop, and sellers who have to move due to life changes. The number of existing homes for sale increased in the latest available data.
But soaring home prices and high rates are still pricing the average American out of homeownership. Wage growth decelerated in March even as the cost of homeownership crept up.
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