The Mortgage Bankers Association’s (MBA) latest survey showed a pullback in mortgage applications, with rates dipping slightly after a three-week climb. The week’s numbers were also affected by the Memorial Day holiday, contributing to larger unadjusted declines. Still, the broader trend remains intact, with purchase demand continuing to outperform last year despite short-term rate volatility. “Most mortgage rates moved lower last week, with the 30-year fixed rate declining to 6.92 percent and staying in the 6.8 to 7 percent range since April,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. He noted that purchase applications remain 18 percent higher than the same week last year, driven in part by a modest rise in FHA activity. Meanwhile, refinance activity fell again, and the average refi loan size dropped to the lowest level since July 2024, suggesting borrowers are still holding out for better rates. Seasonally adjusted refinance applications fell 4 percent from the previous week, while purchase apps also declined 4 percent. On an unadjusted basis, both categories dropped by 15 percent, though the year-over-year numbers remain solid: purchases are up 18 percent and refis are up 42 percent versus this time in 2024. Mortgage Rate Summary:

Today is the 81st anniversary of D-Day. “My granddad was responsible for 25 downed German planes in WW II. To this day, he is still known as the worst mechanic the Luftwaffe ever had.” On the anniversary of D-Day, let’s hope the entire world is not involved in a war again, although humans have had a recurring theme of conflict. Scaling things down significantly but keeping with the “recurring” theme… Lenders hope that applications and locks are recurring, but it is continuing to be sketchy. According to Curinos’ new proprietary application index, refinances decreased 12% week over week and decreased 28% in May; the purchase index decreased 16% week over week and increased 6% for May as a whole. But in May 2025 funded mortgage volume increased 12% YoY and increased 6% MoM. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures, and drills into this data further here. (Today’s podcast can be found here and this week’s is sponsored by CreditXpert, the credit optimization platform that helps today’s top mortgage originators and more than 60,000 mortgage professionals qualify more applicants, make more competitive offers, reduce LLPA premiums, and close more loans. Today’s has an interview with Jake Perkins on the new Chrisman Marketplace and how it is adding value to the industry.) Products, Software, and Services for Lenders Following a highly successful launch, Origination Boost, spearheaded by Mandi Feely-Swain, EVP of Premier Mortgage Resources and Idaho’s #1 Loan Originator, is proving to be a game-changer for loan officers. Now in its second year, Origination Boost is not just maintaining momentum; it’s raising the bar and helping loan officers move closer to their goals. The program’s twice-monthly coaching calls continue to offer tactical strategies and high-level mindset coaching, keeping participants laser-focused on results. The exclusive Origination Boost app adds even more value, offering on-the-go accountability tools and tracking systems that drive measurable production increases. Feely-Swain recently announced new incentives for those participating in Origination Boost, including free marketing services when goals are met. Learn more: info@pmrloans.com.

The bond market was likely taking a bit of a lead-off ahead of today’s jobs report, inspired by a string of weaker economic data over the past week.  Wednesday’s ADP and ISM data had an especially notable impact, prompting us to note the asymmetric risk associated with NFP at the time. In other words, traders were gearing up for a number that was even lower than the 130k consensus.  When the actual number came out at 139k, there was a rush to get back into a more neutral position. While it’s true that last month’s NFP was revised to 147k from 177k, this is not significant evidence of weakness in the bigger picture. 177k was a big beat at the time and 147k is still quite healthy given current immigration dynamics. Top it all off with a relatively steady 4.2% unemployment rate and this report simply wasn’t bad enough to justify the lead-off.

A Bloomberg report alleges the regulator’s own attorneys are raising alarm over a potential increase in fraud, corruption and other predatory practices.

The Federal Reserve Board governor said higher import tariffs could have a “persistent” impact on inflation.

Even with the four basis-point drop, the 30-year fixed rate mortgage remained at levels last seen in February as the Spring homebuying season reaches its climax.

But improved for-sale supply is providing buyers with more options and helping to keep softer price pressures for those looking to buy, writes Cotality’s Chief Economist.

Funding for Volo Loans, which assists U.S. homebuyers in Costa Rica, comes after recent polling showed a significant share of Americans open to moving abroad.

Bonds Dial Back Ahead of Big Jobs Report

It was a fairly interesting day for bonds, relative to the calendar of scheduled events.  Domestic econ data was unimportant and markets traded accordingly from 8:30-8:45am. At that point, the European Central Bank announcement hit the wires and the takeaway was fairly hawkish, despite the rate cut.  At the same time, newswires made the rounds regarding a Trump/Xi phone call that could lead to future meetings and improved trade relations–a narrative that’s generally produced “risk-on” results for stocks and bonds. Then in the afternoon, stocks pulled back as Trump and Musk exchanged words on social media (TSLA down about 16% on the day). Lastly, we could also be seeing both sides of the market moving to cash to some extent ahead of the jobs report. Either way, the willingness to react to data so far this week means Friday’s jobs data should be treated with just as much respect as normal.

Econ Data / Events

Jobless Claims

247k vs 235k f’cast, 239k prev

Market Movement Recap

08:42 AM Slightly stronger overnight and little-changed after econ data.  MBS up an eighth and 10yr down 3bps at 4.326

09:26 AM Losing ground after ECB announcement.  MBS down 1 tick (.03) and 10yr up half a bp at 4.36

Mortgage rates began the day perfectly in line with yesterday’s latest levels for the average lender. By the afternoon, the underlying bond market had lost enough ground that a handful of lenders were forced to issue mid-day reprices thus taking the average just a bit higher. Unlike the past few days, there wasn’t a highly important economic report to cause volatility this morning. The underlying bond market drifted into progressively weaker territory on a combination of factors.  These included the market’s reaction to the European Central Bank’s policy announcement as well as headlines regarding a phone call between Trump and Xi that may lead to improved trade relations. In general, lower tariffs and freer-flowing trade have resulted in stocks and rates moving higher together–what the market sometimes refers to as a “risk-on” move. Stocks notably ended up moving lower by the afternoon even as bond yields remained higher.  We can reconcile this in several ways, but none of them are too important. What’s important is that tomorrow morning brings the big jobs report–the data that has the greatest potential to cause volatility for rates of any of this week’s offerings. Potential isn’t always realized.  The farther the number falls from forecasts, the greater the potential impact, for better or worse.