Since the start of the year, mortgage rates have been all over the place, hitting multi-year highs one week only to come back down the next. But while interest rate volatility had dissuaded borrowers for months, many returned to the mortgage market last week.

After falling 1.5 percent last week, mortgage applications rebounded, increasing 5.1 percent by June 15, as the average rate for a 30-year fixed-rate mortgage remained unchanged at 4.83 percent, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Further, applications for refinances increased 6 percent while applications for purchases increased 4 percent.

But why?

The gain was primarily driven by applications to refinance a home loan, which rose 6 percent for the week but were still 31 percent lower than a year ago when interest rates were lower.

And according to an MBA economist, it was a mixed week for rates with treasury yields finishing the week slightly higher.

Mortgage applications to purchase a home – which are less rate-sensitive than refinances – however, rose 4 percent from the previous week and were 3 percent higher than a year ago.

But homebuyers can still expect to be challenged.

Rising home prices and a severe shortage of homes for sale, especially on the lower end of the market, will continue to challenge buyers, particularly first-time ones, who are extremely price-sensitive. As a result, unaffordable mortgage rates, increasing property values and impossibly low inventory of affordable houses have weighed on applications throughout the year.

According to online real estate company Zillow, U.S. home values jumped in April, with the median at $215,600, an 8.7 percent increase from the same time frame last year.

And all this activity and volatility may explain why the adjustable-rate mortgage share of total activity rose to 7 percent of total applications since they offer lower interest rates than the 30-year fixed and can, therefore, help buyers who are struggling to afford a home.

Experts predict that home prices will continue to rise as long as supplies are so tight. And while there was a sizable gain in single-family home construction in May, builders are still producing far fewer homes than are needed, and what they are producing is mostly in the move-up or luxury market. The low end is – still – the leanest.

At DeLeon Sheffield Company, we know that the real estate market is a rollercoaster – and we’ve been on this ride for a long time. We have the patience, experience and tenacity to weather just about any up or down this – or any – market can throw our way and are here to help you do the same.

If you’re ready to make your homebuying dreams a reality but are discouraged by the endless stream of headlines, give us a call today.

Because at DeLeon Sheffield Company, ‘We’re More Than Realty; We’re Family.’