The hot housing market may be stalling out after riding high since January due to concerns of rising COVID cases and volatile interest rates.

A survey released from the Mortgage Bankers Association on Wednesday indicated that mortgage applications dipped 4% for the week ending July 16 after riding on a 16% surge the week prior.

According to Joel Kan, associate vice president of economic and industry forecasting at MBA, “The 10-year Treasury yield dropped sharply last week, in part due to investors becoming more concerned about the spread of COVID variants and their impact on global economic growth.

“There were mixed changes in mortgage rates as a result, with the 30-year fixed rate increasing slightly to 3.11% after two weeks of declines. Other surveyed rates moved lower, with the 15-year fixed rate loan, used by around 20% of refinance borrowers, decreasing to 2.46% - the lowest level since January 2021,” he added.

However, refinances increased to 64.9% of total mortgage applications, up from 64.1% the previous week.

ARM mortgages decreased to 3.3% of total applications, while FHA comprised 9.6% of total applications, up 0.1% from a week ago. VA mortgages jumped from 10.3% to 10.5%, and USDA mortgages remained unchanged at 0.5% for the week, the MBA survey said.

The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balance increased to 3.11%, while 30-year fixed-rate mortgages with jumbo loan balances slipped to 3.13% for the week.

Also decreasing was 30-year fixed-rate mortgages backed by FHA, which declined to 3.08%.

A 15-year fixed-rate mortgage also dropped to 2.46% from 2.48%, and 5/1 ARMs mortgages decreased from 3.02% to 2.74%.

Concerns over the a resurgence in COVID cases across the U.S. derailing the economic recovery have caused concerns that threaten the market’s progress as experts warn of another wave of infections and deaths from the Delta variant that now makes up 83% of all new virus cases.

Real Estate Out of the 25 largest U.S. metropolitan areas, Minneapolis and Atlanta swapped the top two spots this year as the most affordable, with Minneapolis taking the No.1 spot, while St. Louis, Detroit and Pittsburgh rounded out the top five cities on the list, according to a new report released by Photo: REUTERS/Larry Downing