US Mortgage Demand Steady Amid Rising Rates, Home Sales Near Decade Lows

Mortgage rates in the U.S. have risen slightly to their highest levels in about a month, with the average 30-year fixed mortgage rate reaching 6.84%, yet overall mortgage demand remains resilient. Purchase applications increased by 3% week-over-week and are 22% higher than a year ago, driven largely by conventional loans, while refinance applications declined by 3% due to the high rates limiting borrower benefits. Despite these stable purchase activities, existing home sales dropped 2.7% in June to an annual pace of 3.93 million, the lowest in over a decade, mainly because high mortgage rates are suppressing demand and causing homes to stay longer on the market. Inventory has increased modestly, with 1.53 million homes listed, but remains insufficient to meet demand, keeping median home prices at record highs around $435,300. The housing market remains challenged by affordability issues and a chronic shortage of homes, with experts noting that a meaningful drop in mortgage rates could unlock significant pent-up demand. However, until rates fall, both buyers and sellers face a stagnant market, with financial pressures mounting across housing-related industries.