© Reuters. FILE PHOTO: Real estate signs advertise new homes for sale in several new developments in York County, South Carolina, US February 29, 2020. REUTERS / Lucas Jackson
By Evan Sully
(Reuters) – The number of mortgage applications increased last week, due to an increase in refinancing activity and a slight increase in purchases as mortgage rates fell.
The Mortgage Bankers Association (MBA) said on Wednesday that its seasonally adjusted stock index rose 16.0% in the week ending July 9 from the previous week. This reflects a 20.4% increase in requests to refinance existing loans and an 8.3% increase in requests to purchase a home.
The average contractual interest rate on traditional 30-year mortgages fell to 3.09% last week, the lowest level since February, from 3.15% the week before. This week’s data included an adjustment for the July 4th vacation.
“There may have been a delayed overflow of requests from the week before, when rates also went down, but there was not a lot of response in terms of refinancing requests,” said Joel Kan, vice-president. -Associate president of MBA’s economic and industrial forecasting, in a statement. . “Purchase requests increased last week, but the average loan size declined to its lowest level since January 2021.”
This week’s data comes just a week after the number of mortgage applications fell to the lowest level since January 2020.
Rising house prices combined with insufficient supply continued to weigh on the housing market.
“We continue to see ebbs and flows as housing demand remains strong but inventories for sale remain low,” Kan said. “However, lower rates may help some homebuyers close their purchases, especially first-time homebuyers.”
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