Homebuyers shrugged off higher mortgage rates to go bargain hunting last week as inventories continued to swell in many markets, according to a weekly survey of lenders by the Mortgage Bankers Association (MBA).
The MBA’s Weekly Mortgage Applications Survey showed requests for purchase loans were up by a seasonally adjusted 3 percent last week compared to the week before and 22 percent higher than a year ago.
Joel Kan
“The 30-year fixed mortgage rate edged higher last week to its highest level in four weeks at 6.84 percent, while rates for other loan types were mixed,” MBA Deputy Chief Economist Joel Kan said in a statement. “Purchase applications finished the week higher, driven by conventional purchase loans, and continue to run ahead of last year’s pace.”
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One interesting tidbit from the survey: At $426,700, the average purchase loan request amount was down 7 percent from March, when it hit $460,000.
With listings on the rise, 30 of the nation’s 50 largest markets saw home prices slip from May to June, according to Redfin’s June Home Price Index. Nationwide, annual home price appreciation slowed to 3.4 percent, the lowest rate since June 2023.
But the National Association of Realtors reported Wednesday that existing-home sales decreased by 2.7 percent from May to June, with first-time homebuyers accounting for only 30 percent of sales.
Lawrence Yun
NAR Chief Economist Lawyrence Yun said that, while some housing markets “appear to have a temporary oversupply at the moment,” in the long term, more supply is needed to increase the share of first-time homebuyers.
Pantheon Macroeconomics Senior U.S. Economist Oliver Allen called the drop in June existing home sales “something of a surprise given the recovery in mortgage purchase applications in recent months and the slight dip in mortgage rates from their recent peak in May.”
The upturn in mortgage demand “suggests sales will rise slightly over the next few months, but the gains are likely to be limited by still very high mortgage rates and stretched affordability,” Allen said in a note to clients Wednesday.
Mortgage demand creeping back up
Source: Mortgage Bankers Association.
At 165.1, the MBA’s seasonally adjusted purchase loan applications index is up 29 percent from its 2025 low of 127.7 registered on Jan. 3.
Oliver Allen
“The increase in mortgage purchase applications of late has been accompanied by a further recovery in the number of existing homes on the market, which ticked up to 4.2 months of sales in June, the highest in more than five years,” Allen noted.
That suggests many homeowners who have been feeling locked in to low mortgage rates are starting to consider a move again, Allen said.
But at $435,300, the median existing home price in June was up 2 percent from a year ago, to a new record high for the month.
Lower home prices “probably are required for the market to clear,” Allen said.
A seasonally adjusted three-month average of NAR’s median home price shows “a clear downtrend since the start of the year,” and in March and April the Case-Shiller home price index posted its first back-to-back decline in more than two years.
“We think further gradual falls in home prices are likely over the rest of this year,” Allen concluded.
Mortgage rates are more difficult to forecast, given uncertainty over whether the Trump administration’s tariff policies will rekindle inflation.
The latest reading of the consumer price index (CPI) showed annual inflation in June moving away from the Federal Reserve’s 2 percent goal for the second month in a row.
Since hitting a 2025 low of 6.48 percent on April 4, rates on 30-year fixed-rate mortgages have been rangebound in the high sixes.
Mortgage rates remain rangebound
At 6.71 percent Tuesday, rates on 30-year fixed-rate conforming mortgages are down 34 basis points from a 2025 high of 7.05 percent registered on Jan. 14, according to rate lock data tracked by Optimal Blue.
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