Higher rates usually scare buyers off. Last week they did the opposite.
Demand jumped almost 11% even as the average rate crept higher. It was a busy week for lenders.
Both buyers and homeowners jumped back in. They seemed to be making one last push before summer.
The rate move itself was tiny, with the 30-year fixed loan ticking up to 6.60% from 6.57%. That's the kind of nudge most buyers can shrug off.
So they kept shopping. Lenders saw more loan traffic than the week before.
Rates rose, but demand didn't blink. Buyers also paid a touch less in points.
Points are the upfront fee you pay on a loan. A lower fee helps offset a higher rate.
The week was also bumpy, since news from the Middle East kept rates bouncing. MBA chief economist Mike Fratantoni said that let some borrowers catch lower rates on the right day.
Think of a busy sale where the price keeps changing. Shoppers grab their moment the second it dips.
Mortgage rates tend to follow the bond market, and that market swung all week.
The biggest move came from refinancing. Those applications rose 15% in a week.
Refinancing means trading your old loan for a new one at a better rate. When rates dip, that swap can cut your monthly bill.
Refinancing also ran 20% above the same week last year. The reason is simple.
Rates a year ago sat about a third of a point higher. So more homeowners can finally save by redoing their loan.
That gap is what pulled them back in. A third of a point may sound small, but on a big loan it adds up fast.
Homebuyers showed up too. Purchase applications rose 7% for the week and 4% from last year.
More of them reached for an adjustable-rate mortgage. That's a loan whose rate can change later but often starts cheaper.
The share of those loans climbed to 8.6% of all applications. The typical five-year version sat near 5.96%.
That sits below the going fixed rate, which explains the pull. The loans counted here cap out at $832,750, which covers most homes outside the priciest cities.
Rates were flat to start this week. But a fresh inflation report could push them either way.
As Mortgage News Daily's Matthew Graham put it, the market is already priced for the expected numbers. It's the surprises that move rates.
Anything far from the forecast could swing them fast. The next inflation report lands soon, and traders will watch it closely.
Housing tends to cool once summer hits. This week may be one of the last strong ones before the slowdown.
Until then, borrowers are buying the dips.
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