With the 10-year Treasury yield breaching 3% earlier this week, mortgage rates are set to trend higher. That will push refinancing activity down to 18-year lows by the end of the year. Purchase demand is far less sensitive to rate changes, and may even receive a short-term boost from buyers bringing forward a purchase to beat even higher future rates. But with the lack of inventory weighing heavily on buying sentiment, applications for purchase will probably just hold their ground over the next few months.
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