June 4, 2026, aerial view of a residential area in Pembroke Pines, Florida.
Joe Radle | Getty Images
Mortgage interest rates have been moving within a narrow range for more than a month, and that range is relatively high. As a result, demand for housing loans has not changed much.
Total mortgage applications fell 2.2% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Additional adjustments have been made for the Independence Day holiday.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $832,750 or less, including origination fees for loans with a 20% down payment, decreased by 0.65 points to 0.64 points and increased to 6.58% from 6.57% the previous week.
The number of mortgage refinance applications fell 4% for the week, and rose 8% from the same week last year. At this time last year, 30-year fixed rates were just 19 basis points higher. Most lenders argue that the refinancing costs aren’t worth it unless the borrower can lower their interest rate by at least three-quarters of a point.
The number of applications for mortgages to buy homes fell by 1% over the week and increased by 5% compared to the same week last year. As inventory increases and homes sit longer, buyers are starting to gain more influence in the market. After years of favoring sellers, more agents now say the market is balanced.
While overall demand for home loans is sluggish, products with lower down payments are gaining momentum.
“While traditional purchase activity decreased, government purchases increased slightly, driven by a 5% increase in VA purchase applications. Refinance applications decreased 4% as homeowners had little incentive to act as interest rates remained high,” Mike Fratantoni, senior vice president and chief economist at MBA, said in a release.
Mortgage rates rose slightly earlier this week, according to a separate Mortgage News Daily survey. The Iran war was back in the headlines on Tuesday, with reports that the US may once again block Iranian oil exports.
“Higher oil prices imply higher inflation. Higher inflation, all else being equal, leads to higher interest rates,” said Matthew Graham, chief operating officer at Mortgage News Daily.
