Mortgage rates have been stable but high, with the average rate for a 30-year fixed mortgage rising slightly to 6.58%. This has led to a 2.2% drop in total mortgage application volume last week, according to the Mortgage Bankers Association. Refinancing applications fell by 4%, although they are still 8% higher than the same week last year.
The current market conditions suggest that refinancing is only appealing if borrowers can reduce their rates by at least 75 basis points. Meanwhile, purchase mortgage applications decreased by 1%, but are 5% higher than a year ago, indicating some resilience in buyer interest. The market is shifting towards a more balanced state, with increasing inventory allowing buyers to gain leverage.
Additionally, government-backed loans, particularly VA purchase applications, saw a modest increase. Analysts note that rising oil prices could lead to higher inflation and subsequently higher mortgage rates, which may further impact demand