07/22/2026
Mortgage applications climb as housing inventory grows
Buyer demand gained momentum despite rates remaining near their highest levels of 2026
Mortgage applications rose amid a growing supply of homes for sale, even as rates near their highest averages in a year. (Joerg Boetel/CoStar)
Mortgage applications rose amid a growing supply of homes for sale, even as rates near their highest averages in a year. (Joerg Boetel/CoStar)
By Moira Ritter
July 22, 2026
7:00 AM ET
Key takeaways
Mortgage applications rose 1.9% in the week ended Friday, driven by a 6% increase in purchase applications.
Buyer activity appears to be getting support from a growing supply of homes for sale, even as mortgage rates near their highest averages in a year.
Economists say buyers may benefit from focusing on affordability and long-term plans rather than trying to time rate movements perfectly.
More homebuyers found ways into the market last week — even as mortgage rates climbed to their highest weekly average of 2026.
The Mortgage Bankers Association reported a 1.9% increase in mortgage applications in the week ended Friday. That was mostly driven by a bump in purchase activity: Purchase applications increased 6% from a week earlier, offsetting a 2% weekly decline in refinance activity.
Compared to a year ago, purchase activity is up 0.2% — a shift from last week when activity underperformed the same week in 2025. Refinance activity is running 7% ahead of last year's pace.
The boost in demand comes as mortgage rates are near their highest averages in a year. As of last Thursday, the 30-year, fixed-rate mortgage averaged 6.55% on a weekly basis. By Tuesday, daily averages were up to 6.75%.
More inventory is offsetting elevated borrowing costs
While elevated, volatile mortgage rates have created barriers for homebuyers, an increase in for-sale inventory has offset some of that headache.
Indeed, data from Homes.com showed that inventory was up 4.2% in June compared to a year earlier, creating more opportunity for buyers.
"Growing home inventory in many markets is supporting more purchase activity," he said in a statement. "Incoming data show that inflation dropped in June, but with oil prices spiking again, that improvement seems unlikely to continue in July data, and mortgage rates are likely to remain higher as a result."
With that in mind, Jeff DerGurahian, chief investment officer and head economist at loanDepot, says the key for borrowers is "not to focus on perfectly timing rates."
"The broader housing story remains the same," he said in a statement. "If you find a home that fits your budget and long-term plans, it can make sense to move forward, especially because refinancing remains an option if rates move lower down the road."
