Mortgage applications hold steady as refinance demand climbs

The refinance share of total applications increased to 41.5% from 40.3% the week prior.

Purchase demand moved in the opposite direction. The seasonally adjusted Purchase Index fell 1% from the prior week, while the unadjusted figure declined 12%, reflecting the holiday-shortened period.

On a year-over-year basis, purchase applications remained 3% above year-ago levels, a modest but meaningful sign that underlying demand has not collapsed.

“Mortgage rates changed little over the course of last week, despite the more hawkish tone from the FOMC at its June meeting,” said Mike Fratantoni, MBA’s senior vice president and chief economist, based in Washington, D.C.

“Purchase application volume edged slightly lower, while refinance activity posted modest gains. Despite the elevated mortgage rates and overall economic uncertainty, mortgage application volume is running 8% above year-ago levels.”