This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
For the week of June 15th – June 22nd, 30-year and 15-year interest rates decreased slightly. Following the Federal Reserve's decision to pause rate hikes, mortgage demand increased.
According to the Mortgage Bankers Association, mortgage applications for the week ending June 21st saw a 0.5% climb compared to the previous week. This modest growth highlights that while demand is there, activity continues to be constrained by low levels of affordable inventory.
Joel Kan, MBA's Vice President and Deputy Chief Economist, noted that "Purchase applications increased, driven by a 2% gain in conventional purchase applications and a 3% increase in FHA purchase activity."
On Tuesday, data from the U.S. Census Bureau revealed a 21.7% surge in housing starts from April, with a 5.7% increase from May 2022, reaching a total of 1.63 million. It's a hopeful sign that homebuilders will help offset an extremely low level of existing home inventory by getting a jump start on new projects.
Fed Watch: Looking ahead, the focus is on the upcoming July 25th Federal Open Market Committee (FOMC) meeting. According to the CME Group, 76.9% of forecasters anticipate a 0.25 percentage point increase in interest rates, while 23.1% predict rates to remain the same. No forecasters expect rates to decrease.
Stay tuned for more updates as we navigate the ever-evolving market landscape.
Did You Know?
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Market Review:
- Per Black Knight's Production Metrics, the breakdown of mortgage production volume is as follows: 87.71% for purchase transactions, 10.22% for cash-out refinances, and 2.07% for rate and term refinances.
News You Can Use
- Lower Rates Help Mortgage Application Volume to Recover
- Existing-Home Sales Edged Higher by 0.2% in May
- Low U.S. housing inventory is opportunity for home builders to gain market share
- Economic, Housing and Mortgage Market Outlook – June 2023
- US consumers' near-term inflation expectations hit two-year low; sentiment rises
- Despite a Cooling Housing Market, Home Prices and Rents Remain High
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