Applications Up As Rates Fall Below 7%

Mortgage applications increased last week, though they didn’t match the huge boost seen the week prior.

The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — increased by 0.9%, adding to last week’s 15.6% jump.

Adjusted purchase applications increased by 2%, while the unadjusted index was down 0.1% and 12% lower YOY.

Rates declined to 6.94%, its lowest level since March, after the FOMC’s meeting last week.

“Purchase applications increased a small amount for the week, led by applications for conventional loans. Refinance application volume was also down slightly for the week but remains about 30% higher than this time last year,”  said Mike Fratantoni, MBA’s SVP and Chief Economist.

“Purchase volume is still more than 10% behind last year’s pace, but MBA is forecasting a pickup in home sales for the remainder of the year as more inventory is hitting the market.”

Inventory is improving across the country as sellers find they can’t wait out rates any longer and buyers remain skittish about affordability.

In particular, pandemic boom areas are seeing huge gains in inventory– but far less demand than in the last few years.

Nick Gerli, CEO and Founder of real estate analytics firm Reventure Consulting, called Florida’s housing market “crazy” in a post on X, formerly Twitter.

“There’s ZIP codes where inventory has nearly tripled from its level last year… That’s the sign of a major selloff. And indicates prices are likely to drop in H2 2024,” he wrote.

He specifically pointed to Port Richey, a metro area north of Tampa, which saw a 248% YOY spike in listings.

Home price growth is also slowing. A Redfin analysis found that prices were up just 0.3% in May, the smallest increase on a seasonally adjusted basis since January 2023.