For the week ending 18 July 2025, US MBA mortgage applications increased by 0.8%, following a previous decline of 10.0%. The market index rose to 255.5 from 253.5.<\/p>\n
The purchase index is now at 165.1, compared to the previous 159.6. However, the refinance index decreased to 747.5 from 767.6 in the prior week.<\/p>\n
Mortgage Rate Trends
\nThe average 30-year mortgage rate edged up slightly to 6.84% from 6.82%. Mortgage applications tend to be inversely related to mortgage rates.<\/p>\n
We see this latest mortgage data as confirming a stalemate in the housing market, not a turning point. The small uptick in purchase applications despite slightly higher rates suggests a floor of persistent demand, but the market lacks any real catalyst for a breakout. This reinforces our view that the primary driver for derivatives remains central bank policy, not weekly housing figures.<\/p>\n
The core issue for traders is the Federal Reserve’s path, which is clouded by conflicting data. While the latest June 2025 CPI reading came in at 2.8%, which is an improvement, it remains stubbornly above the central bank’s 2% target. This places policymakers in a holding pattern, making significant bets on near-term rate cuts a risky proposition.<\/p>\n
Policy and Market Implications
\nRecent comments from Chairman Powell underscore this caution, emphasizing that the board remains strictly “data-dependent” before committing to any policy easing. This official uncertainty suggests instruments tied to rate expectations, like SOFR futures, are likely to remain range-bound in the coming weeks. We believe the market has already priced in the high probability of rates holding steady through the next meeting.<\/p>\n
For traders looking at housing-specific products like options on the ITB homebuilders ETF, the environment favors selling volatility. National home prices have shown surprising stickiness, with the most recent S&P Case-Shiller Home Price Index showing a 4.5% year-over-year gain. This resilience suggests a major price collapse is unlikely, making strategies like iron condors or covered calls more attractive than outright directional bets.<\/p>\n
This period of stagnation has historical precedent from the 2022-2024 cycle, where the market adjusted to higher rates through lower transaction volumes rather than a dramatic price crash. That period demonstrated that the housing market can absorb elevated borrowing costs for an extended time. We anticipate a similar pattern of low-volume, sideways trading to persist.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US MBA mortgage applications rose 0.8% as purchase activity increased, despite slightly higher mortgage rates.<\/p>\n","protected":false},"author":62,"featured_media":17026,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27031","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27031","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=27031"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27031\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17026"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=27031"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=27031"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=27031"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}