Mortgage rates

"We will continue to make our decisions meeting by meeting, based on the totality of incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks," he wrote in prepared remarks to be delivered to the House Financial Services Committee.

While home sales should remain constrained this year because of higher rates, growth in the entry-level market has far outpaced that for above-median income families.

The average for the 30-year fixed slipped 2 basis points in anticipation of the Federal Open Market Committee pausing short-term rate hikes, said Sam Khater, chief economist.

Monetary policy officials have finally gone a month without tightening but made it clear more action could lie ahead, suggesting it could be awhile before housing finance costs consistently fall.

But Zillow's rate tracker came in flat, while Optimal Blue's rose 10 basis points from its low last Thursday.

But activity is still very low, as just 1% of the market is in the position to refinance thanks to high interest rates, Keefe, Bruyette & Woods said.

Worries about unknown future expenses and the state of their own finances are also causing anxiety for over 80% of U.S. consumers, according to new research from BMO.

A change in investor sentiment toward an expected pause by the Fed in short-term rate hikes was the driving force behind the current surge, Freddie Mac said.

It was the eighth consecutive quarterly decline of origination activity, according to a report published by Attom Data.

Investors are concerned that a deal will not be reached in Washington and a default will take place, driving up the benchmark 10-year Treasury yield.