Rates Tick Up, Pushing Apps Down Slightly

ByTMN Editor Reading Time: 2 minutes

Mortgage rates ticked up last week as economic data revealed a still-growing economy, forcing applications down slightly.

The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — shrank by 1.3%, reversing from the week prior’s 11% jump.

Mortgage rates increased marginally to 6.14% after eight weeks of declines but remain a multi-year lows.

“Last week’s incoming data showed an economy that is still growing at a solid pace, even as inflation continues to decline. As a result, mortgage rates were up modestly, with the 30-year fixed mortgage rate increasing slightly,” said Mike Fratantoni, MBA’s SVP and Chief Economist. 

“With this move, refinance application volume declined on the week but remains almost three-times as high as last year’s pace.”

He noted that purchase activity, unlike refi volume, saw a boost as more prospective buyers re-start their home searches.

Adjusted purchase applications rose by 1%, while the unadjusted index increased by 1% and was 9% higher year-over-year.

“Inventories of both new and existing homes have been increasing over the course of 2024, meaning that potential buyers have properties to look at and now have somewhat lower mortgage rates leading to better affordability,” Fratantoni added.

Affordability was a major topic during Tuesday’s vice presidential debate, with Democrat Tim Walz defending Kamala Harris’s plan to give $25,000 in aid to first-time buyers.

He lambasted institutional buyers as a threat to the average American’s ability to buy a home, saying “the problem we’ve had is that we’ve got a lot of folks that see housing as another commodity.”

On the other end of the spectrum, J.D. Vance claimed that illegal immigration is the biggest driver of housing unaffordability.

“You’ve got housing totally unaffordable because we brought in millions of illegal immigrants to compete with Americans for scarce homes,” he said.

Analysts tend to disagree with both assessments, pointing to stock shortages as the biggest problem for housing affordability, though neither candidate directly addressed it.