US Mortgage Applications Fall for 2nd Week

The volume of mortgage applications in the US fell by 2.9% on the final week of July, extending the 6.4% decline in the earlier period, and marking the largest back-to-back decline in two months. The drop was in line with the increase in mortgage rates, with that on a 30-year fixed contract rising to a one-year high of 6.81%, as concerns that the Federal Reserve may not combat inflation in the near term triggered a surge in term premiums, with the yield on the 30-year Treasury bond rising to its highest in 19 years. Applications to refinance a mortgage, which are sensitive to short-term changes in interest rates, fell by 2% from the previous week to the lowest level since May of last year. Meanwhile, applications for a mortgage to buy a new home fell by 4%.

The volume of mortgage applications in the US fell by 6.4% from the previous week on the period ending July 24th to mark the sharpest weekly decline in two months. The drop was in line with the increase in benchmark mortgage rates, with that on a 30-year fixed contract rising to a one-year high of 6.76%, as inflationary pressures and evidence of a robust labor market supported expectations of a Federal Reserve rate hike this year. Applications to refinance a mortgage, which are sensitive to short-term changes in interest rates, fell by 9.9% from the previous week to the lowest level since May of last year. Meanwhile, applications for a mortgage to buy a new home fell by 3.6%.

The volume of mortgage applications in the US rose by 1.9% on the week ending July 17th, rebounding from two straight losses in the preceding periods, according to data compiled by the Mortgage Bankers Association. The slight bounce took place despite another period of increasing interest rates, with the benchmark 30-year fixed-mortgage gaining 4bps to its highest in 11 months. Rising fuel prices due to a fresh halt on Middle Eastern energy supply raised yields on longer-maturity Treasury securities. Applications for a mortgage to purchase a new home rose 6%, with surveys on real estate agents noting that sellers seem to be more willing to cut prices. In turn, applications to refinance a mortgage, which are more sensitive to short-term changes in interest rates, fell by 2%.