Mortgage Demand Surges as Rates Fluctuate

Despite an increase in mortgage rates, there was a surprising surge in demand for refinancing last week, with applications jumping 13% compared to the previous week. This contradicts the usual trend where refinancing demand moves in the same direction as mortgage rates. It is speculated that borrowers may be concerned about rates going even higher, prompting them to take action now. Additionally, the limited inventory and higher rates are making it more challenging for homebuyers, resulting in a 2% increase in mortgage applications for home purchases. The average loan size for purchase applications reached its highest level in six weeks, indicating a potential rebound in demand. However, the overall supply of homes remains low, leading to bidding wars. Mortgage rates have remained stable as investors await the Federal Reserve's decision on interest rates.