US Mortgage Applications Drop 1.2% as Rates Near 7%, USD Steady

US mortgage applications declined 1.2% for the week ending May 23, a significant improvement from the previous week's 5.1% drop. The market index fell to 235.7 from 238.5, driven primarily by weakening refinancing activity which dropped to 634.1 from 682.5. However, purchase applications showed resilience, rising to 162.1 from 157.8. The 30-year mortgage rate edged higher to 6.98% from 6.92%, approaching the psychologically important 7% threshold. These elevated rates continue to pressure the housing market and could impact consumer spending patterns. For forex traders, persistently high mortgage rates support the Federal Reserve's restrictive monetary policy stance, potentially providing underlying support for the US dollar. The mixed housing data suggests economic resilience despite rate pressures, keeping USD neutral against major pairs in the near term.