Housing market gets brief shot of adrenaline

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Published Date 7/14/2025

What a difference a day makes. A small-but-brief drop in interest rates can make one big ripple even when there is an otherwise tepid mortgage demand.

Realtor.com’s Diana Olick reports that total mortgage application volume jumped 9.4% last week compared with the previous week, according to the Mortgage Bankers Association (MBA), resulting in an adjustment for the July Fourth holiday.

The average contract interest rate was the lowest level in three months, accompanied by a 9% jump in refinance applications — 56% higher than the same week one year ago. Refinance demand has been particularly weak because mortgage rates were stuck at high levels for so long.

That 9% was mirrored by the same increase in mortgage loan applications for the week and was 25% higher than the same week one year ago.

She cites the MBA’s Joel Kan, who says, “Homebuyer demand is being fueled by increasing housing inventory and moderating home-price growth. The average loan size on a purchase application, at $432,600, was at its lowest since January 2025.”

It’s a much trickier market than those in the past, says Olick. “While purchase mortgage demand has historically trended pretty closely with actual home sales, there are a lot of unusual factors in today’s market. Consumer sentiment is unsteady, and cancellation rates on contracts have been high for both new and existing homes,” she says. “So far, pending sales, which represent signed contracts, have not been rising along with mortgage demand.”

She also reports that mortgage rates began climbing again just before the July Fourth holiday, and are up again this week so far. “It may not, however, be a sign of a stronger move higher.”

It’s not a matter of what goes up must come down, according to Mortgage Daily News’ Matthew Graham. “We often tend to see slightly brisk movement in the opposite direction after experiencing a consistent trend in the other direction. The month of June was arguably such a trend, and it took rates to their lowest levels in several months. Apart from the last few days of June, today’s rates are still the lowest since late April.”

What comes next? Anybody’s ballgame.

Realtor, TBWS

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