Mortgage Applications Rise Despite Higher Rates as Buyers Respond to Increased Supply

Mortgage applications rose this week, driven by higher purchase activity, as higher rates failed to deter buyers.For the week ending July 17, the Mortgage Bankers Association's Market Composite Index—a measure of total mortgage loan application volume—rose 1.9% on a seasonally adjusted basis from one week earlier.The seasonally adjusted purchase index increased 6% from one week earlier, and purchase activity was up 0.2% year over year. Refinance activity dropped 2% on the week but was up 7% from a year earlier, when rates were even higher.“Mortgage rates reached another high point last week,” says Mike Fratantoni, MBA’s SVP and chief economist. “However, purchase volume increased modestly for the week. Growing home inventory in many markets is supporting more purchase activity."Mortgage rates have faced upward pressure since March due to the Iran war's impact on global oil prices, with each renewed outbreak of hostilities sending borrowing costs back up.Last week, a fragile truce in the Iran conflict broke down, with the U.S. reimposing a naval blockade and conducting sustained airstrikes as Iran targeted regional U.S. bases with missiles, killing multiple U.S. service members.That...