June 30 (Reuters) – US mortgage applications fell the most in nearly five months due to a sharp decline in refinancing activity and purchase applications.
The Mortgage Bankers Association (MBA) said Wednesday that its market index fell 6.9% seasonally in the week ending June 25, compared with a week earlier, the biggest drop since early February. This reflected a decrease of 8.2% in applications for refinancing existing loans and 4.8% in applications for home purchases.
The average contractual interest rate for a traditional 30-year mortgage rose to 3.20% last week from 3.18% the previous week.
“Applications for conventional loans fell last week to the lowest level since May last year,” said Mike Fratantoni, senior vice president and chief economist at the MBA, in a statement. “The average loan size for all purchase applications has increased, indicating that first-time homebuyers who typically get smaller loans are likely to be pushed out of the market due to the lack of entry-level homes for sale.”
Sales of both new and old homes have plummeted this year due to a shortage of homes on the market. read more
Evan Sully reporting; Edited by Dan Burns
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