In an aerial view, a residential neighborhood is seen on June 4, 2026 in Pembroke Pines, Florida.
Joe Raedle | Getty Images
Mortgage rates have been hovering in a tight range for more than a month, and that range is on the relatively high side. As a result, mortgage demand isn’t moving much either.
Total mortgage application volume dropped 2.2% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. An additional adjustment was made for the Independence Day holiday.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, increased to 6.58% from 6.57% last week, with points decreasing to 0.64 from 0.65, including the origination fee, for loans with a 20% down payment.
Applications to refinance a home loan dropped 4% for the week and were 8% higher than the same week one year ago. Last year at this time the rate on the 30-year fixed was just 19 basis points higher. Most lenders say that unless a borrower can cut at least 75 basis points off their rate, the cost of the refinance isn’t worth it.
Applications for a mortgage to purchase a home fell 1% for the week and were 5% higher than the same week one year ago. Buyers are starting to get more leverage in the market, as inventory increases and homes sit for longer. More agents are now saying that the market is balanced, after several years of it being a seller’s advantage.
While overall mortgage demand is down, products offering lower down payments are gaining steam.
“Government purchase volume increased modestly, led by a 5 percent gain in VA purchase applications, while conventional purchase activity declined. Refinance application volume was down 4 percent, as homeowners saw little enticement to act with rates still elevated,” said Mike Fratantoni, MBA’s SVP and chief economist in a release.
Mortgage rates moved slightly higher to start this week, according to a separate survey from Mortgage News Daily. The Iran war came back into the news headlines Tuesday, with reports suggesting that the U.S. could once again stop Iran from exporting oil.
“Rising oil prices imply higher inflation. Higher inflation leads to higher rates, all else equal,” wrote Matthew Graham, chief operating officer at Mortgage News Daily.
