Loan applications to purchase a home are still languishing, up just 0.3 percent week-to-week, on a seasonally adjusted basis, according to the MBA. They are down 15 percent from a year ago. This as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.33 percent. The refinance share of mortgage activity increased to 54.4 percent of total applications, the highest level since March 2014.
The mortgage numbers seem to run counter to the latest readings from the housing market. Sales of existing homes rose 2.6 percent in June from May, according to a report released Tuesday by the National Association of Realtors. Sales of newly built homes have also seen gains. The June reading from the home builders is set to be released Thursday morning.
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The answer to this disconnect between sales and mortgage volume likely lies in the still high percentage of home buyers using all-cash in transactions. One third of June buyers closed their deals with cash, which the Realtors' chief economist Lawrence Yun deemed, "amazing" in a press conference Tuesday. Others say this simply proves the disconnect in the market today between the "haves" and the "have-nots."