Mortgage rates increased by two basis points last week according to the Freddie Mac Primary Mortgage Market Survey as of June 15th. Rates have remained relatively stable over the last six weeks. Meanwhile, purchase activity eased modestly, and refinance activity has continued to pick up recently, reflecting borrowers’ responsiveness to current rate levels.
Mortgage applications increased one percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 19th. “Mortgage rates changed little over the course of last week, despite the more hawkish tone from the FOMC at its June meeting,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Purchase application volume edged slightly lower, while refinance activity posted modest gains. Despite the elevated mortgage rates and overall economic uncertainty, mortgage application volume is running 8 percent above year-ago levels.”
The number of Americans filing claims for unemployment benefits fell more than expected last week, consistent with labor market resilience. Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 215,000 for the week ended June 20, the Labor Department said on Thursday. Though claims have been hovering in the upper end of their 190,000-230,000 range for this year, there has been no material shift in the labor market, which has regained its footing after stumbling last year. There have been no signs of employers resorting to widespread layoffs in response to surging costs stoked by the U.S.-led war with Iran. Companies, however, remain cautious about hiring.
The Federal Reserve’s primary price gauge rose at its highest level since 2023, reinforcing the central bank’s recent tough talk on inflation. Excluding food and energy, the personal consumption expenditures price index showed a 3.4% annual rate after rising 0.3% for the month. The annual core reading was the highest since October 2023. “Inflation is at a 3-year high due to the war in Iran and it’s painful for middle-class and moderate-income Americans,” said Heather Long, chief economist at Navy Federal Credit Union. “People are spending more on gas, along with healthcare and utilities. New Fed Chair Kevin Warsh has made his commitment clear to bring inflation down. The key will be how much relief happens by September.”
