Mortgage applications bounce back from 22-year low

“Despite the increase in rates, application activity rebounded following the Memorial Day holiday week but remained 0.29% below pre-holiday levels,” Kan added.

The refinance index was up by 4%, and the purchase index was 8% higher than the week prior. However, with mortgage rates well above 5%, Kan noted that refi activity is still 76% lower than a year ago, accounting for 31.7% of total applications.

“Purchase applications were down more than 15% compared to last year, as ongoing inventory shortages and affordability challenges have cooled demand, coinciding with the rapid jump in mortgage rates,” said Kan.

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Meanwhile, adjustable-rate mortgages (ARMs), which have become increasingly popular in recent months, now account for 8.1% of total applications, down one basis point from the week earlier.