According to the most recent Mortgage Bankers Association (MBA) survey for June 17, mortgage applications jumped 4.2% from the previous week despite mortgage rates reaching their highest level in 14 years. Joel Kan, associate vice president of economic and industry forecasting for the trade group, said in a statement that mortgage rates “continued to rise last week, with the 30-year fixed mortgage rate jumping 33 basis points to 5.98%; the highest since November 2008 and the largest single-week increase since 2009”.

Kan claims that conventional applications were primarily responsible for the second consecutive week’s spike in buy applications. However, Kan observed a probable trend in this week’s data and highlighted that higher rates typically lower costs. The average loan amount, at just over $420,000, is significantly lower than its peak of $460,000 earlier this year and may indicate that the increase in property prices is slowing, according to the analyst.

The share of applications for adjustable-rate mortgages (ARM) increased to over 10.6%, indicating sustained popularity among borrowers. According to the MBA, the typical interest rate for a 5/1 ARM increased to 4.78% from 4.57% the previous week.

The proportion of FHA applications in total climbed from 11.8% to 12% the previous week. The VA share decreased from 11.7 to 10.7% throughout this time. From 0.6% the week before, the USDA’s proportion of all applications fell to 0.5% this week.

According to the trade association, the typical contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) climbed from the previous week’s 5.65% to 5.98%. It increased from 5.25% to 5.49% for jumbo mortgage loans (for more than $647,200). To read more about the increase in mortgage applications despite the spike in mortgage rates, click here.

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