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Mortgage Apps: Increase Barely Registers As Rates Soar

June 22, 2022
Bottom Line:  Mortgage applications rose last week, mostly catch-up after a holiday-shortened the prior week. While notable given the record moves in mortgage rates last week, the uptick still barely shows up on a trend basis. Applications for refinancing sit near record lows as the vast majority of mortgage borrowers enjoy rates some 250+ basis points below current rates. And purchase volumes have mostly dried up with the surge in mortgage rates. Last week's surge was particularly notable and likely hasn't been fully felt in the primary market. Secondary mortgage rates were up over 75bps in just two weeks. Finally, 5/1 ARM volumes have trended higher this year as borrowers seek to keep payments lower (5/1s have averaged 130bps below 30-year fixed) but have turned lower in the last two weeks. We are keeping a close eye on this as a potential signal that even the last bit of demand for homes might be waning. 
Article by Contingent Macro Research