However, Lewis noted conflicting economic signals raise the possibility that “this could be a short-lived upward blip” for mortgage rates.
The rate hike weighed on mortgage demand last week, with total mortgage application volume falling 5.7%, according to the Mortgage Bankers Association.
“The uptick in rates led to a decline in mortgage applications heading into Memorial Day weekend,” said Joel Kan, vice president and deputy chief economist at MBA. “Both purchase and refinance applications fell, pushing overall activity to the lowest level since early March.”
Kan said homebuyers remain sensitive to small increases in rates given the low inventory of affordable homes for sale.
“[This impact] the refinance market and keeping purchase applications below last year’s levels,” he added. “There continues to be limited levels of existing homes for sale, and many buyers are struggling to find listings in their price range that meet their needs.”
