Mortgage Apps: Only Slight Rebound On Lower Rates

Bottom Line:  Mortgage applications rose slightly but remained near record lows even as effective mortgage rates fell to 5.62% after eclipsing 6% earlier in the month. Mortgage bankers were finally able to pass along some of the decline in secondary mortgage market rates to borrowers. But relatively few borrowers took advantage of the lower rates as affordability remained an issue and likely will until rates get back below 5%. And that appears unlikely until the Fed ends rates hikes and starts cutting, something markets expect next year. But Fed officials were trying to dissuade markets from expecting that. Secondary mortgage market rates have moved sharply higher, particularly yesterday on the back of several hawkish Fed speakers.
 
 Overall, the trend in mortgage applications suggests that the slowdown in housing has continued through July. It appears that purchase application volume will fall towards levels seen in 2015 as the housing market was still recovering from the financial crisis.