Jumbo mortgage market faces challenges amidst bank failures and pricing concerns.

Mortgage demand from homebuyers dropped 2% last week compared to the previous week, and was 32% lower than the same week one year ago, as several bank failures are starting to make it more difficult even for wealthier buyers. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.50% from 6.55%, while the average rate for jumbo loans was slightly lower at 6.37%, but that spread has been shrinking for the last few months. Applications to refinance a home loan increased 1% from the previous week but were 51% lower than the same week one year ago. The Federal Reserve is expected to raise its benchmark interest rate by a quarter point, but it will be the commentary from Fed Chairman Jerome Powell that will have the greatest impact on the bond market, and consequently mortgage rates.