Mortgage applications have slowed as the average interest rate for 30-year mortgages has gone back above 7%.
Loan requests declined 2.6% on a seasonally adjusted basis as of June 28 from a week earlier, according to data from the Mortgage Bankers Association's Weekly Applications Survey.
The average contract interest rate for 30-year fixed-rate mortgages with loan balances below $766,550 or less rose to 7.03% from 6.93%. The same interest rate for 15-year fixed-rate mortgages increased to 6.56% from 6.46%.
"Mortgage rates moved higher last week, crossing the 7 percent mark, even as the latest inflation data has kept market expectations alive for a rate cut from the Fed later this year," Chief Economist Mike Fratantoni said in a statement.
"Purchase applications decreased the final full week of June, even as both new and existing inventories have increased over the past few months."
Also Read: Mortgage Rates Fall For Third Straight Week With Signs Of Lower Inflation, Fed Rates
The Federal Reserve has kept its key interest rate between 5.25% and 5.50% as it aims to push a 3.4% rate of inflation to 2%, but it does plan on cutting the rate once later this year.
Data released by Freddie Mac on Wedensday showed the 30-year fixed-rate mortgage averaged 6.95%, up from 6.86% the previous week and 6.81% a year ago. The 15-year FRM averaged 6.25%, rising from 6.16% last week and slightly higher than the 6.24% average a year earlier.
Price Action: Mortgage lender stocks trended downward in Wednesday's mid-morning trading. JPMorgan Chase & Co. (NYSE:JPM) slipped 0.40% to $208.00, while Bank of America Corporation (NYSE:BAC) declined 0.28% to $40.81 and Wells Fargo & Company fell 0.98% to $60.37.
Mortgage-backed security exchange-traded funds picked up ground by mid-morning. The iShares MBS ETF (NASDAQ:MBB) and the Vanguard Mortgage-Backed Securities ETF (NASDAQ:VMBS) both rose 0.58%, while the SPDR Bloomberg Barclays Mortgage Backed Bond ETF (NYSE:MBG) moved up 0.11%.
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