Slight Rise in Mortgage Rates Does Not Deter Buying Sentiment; US MBA Purchase Index Climbs to 177.7

According to the latest data, for the week ending April 24, 2026 (Q2 2026), the US MBA Purchase Index rose to 177.7 from 175.6 in the previous week. Despite a recent rebound in US Treasury yields driven by inflation concerns and geopolitical tensions in the Middle East, home purchase mortgage applications increased rather than decreased. This indicates that solid underlying demand continues to exert crucial supporting strength during the traditional spring peak season and has not stalled due to a marginal rise in funding costs.

Looking at data details and the market environment, home purchase loans and refinancing loans have recently shown divergent trends. On one hand, as the 30-year fixed mortgage rate edged up to around 6.37%, the highly interest-rate-sensitive Refinance Index dropped 4% from the previous week to 977.9. On the other hand, the volume of loan applications actually used for home purchases not only showed a weekly increase but also surged by over 20% compared to the same period last year, highlighting that current buyers' tolerance for short-term interest rate fluctuations has significantly improved.

This wave of home-buying enthusiasm, which defies the slight rise in interest rates, has primarily benefited from substantial improvements on the market supply side. Mortgage Bankers Association (MBA) Chief Economist Mike Fratantoni pointed out that despite the uncertainty brought by geopolitics, housing inventory in most parts of the country has increased significantly compared to last year, providing potential buyers with more choices and room for negotiation. In addition, the overall US labor market remains highly resilient, enabling home-buying intentions to translate into actual market entry actions, with the increase in conventional loan applications acting as the main driver boosting the index this time.

Looking ahead, the primary headwinds for the housing market in the short term (1-2 months) will come from macroeconomic data and geopolitical risks. Currently, the situation in the Middle East is driving up international oil prices, and coupled with better-than-expected US core capital goods and durable goods orders data, the Federal Reserve may remain patient in its pace of interest rate cuts. This will cause short-term mortgage rates to remain elevated and volatile. In the medium term (3-6 months), if inflation pressure gradually eases with the high base effect and geopolitical risks successfully cool down, driving a decline in long-term US Treasury yields, mortgage rates are expected to fall again. Combined with the further release of existing home inventory in the future, the housing market transaction momentum in the second half of the year will have the potential for further expansion.

Web search reference sources:

• https://www.mpamag.com/us/mortgage-industry/market-updates/mortgage-applications-dip-as-spring-buyers-push-ahead-despite-higher-rates/573475
• https://www.mortgagenewsdaily.com/markets/mbs-recap-04292026
• https://tradingeconomics.com/united-states/mba-purchase-index