Threats of rising mortgage rates may have spooked borrowers last week and prompted them to quickly lock in rates. Total mortgage application volume for refinancings and home purchases jumped 6.3 percent last week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.
Even though mortgage rates remained steady during the week, refinance volume, which had been dropping in recent weeks, surged 13 percent last week.
The 30-year fixed-rate mortgage averaged 4.22 percent last week, unchanged from the previous week, the MBA reports.
“Treasury yields were slightly lower last week as testimony from [Fed Chair Janet] Yellen was perceived to be more dovish than expected and as the market received data signaling weaker inflation and retail sales for June,” says MBA economist Joel Kan. “These factors kept the 30-year fixed-contract rate flat over the week.”
Mortgage applications for home purchases rose just 1 percent last week compared to the week prior. Applications for home purchases are 7 percent higher than a year ago, the MBA reports.
“It could just as easily be some seasonal adjustment distortion, loosening of underwriting standards, or nice weather sparking home improvement goals,” Matthew Graham, chief operating officer of Mortgage News Daily, told CNBC.