(Reuters) – The number of applications for residential mortgages increased last week due to increased refinancing activity and increased buying activity due to falling mortgage rates.
The Mortgage Bankers Association (MBA) said Wednesday that its seasonally adjusted market index rose 16.0% in the week ended July 9, compared with a week earlier. This reflected an increase in applications for refinancing existing loans by 20.4% and an increase in applications for the purchase of a home.
The average contractual interest rate for a traditional 30-year mortgage fell to 3.09% last week, the lowest since February, from 3.15% the previous week. This week’s data includes an adjustment for the Fourth of July holiday.
“There may have been a delayed spread of applications from the previous week, when rates also fell, but there was little reaction in terms of refinancing applications,” Joel Kahn, MBA Deputy Vice President for Economic and Industry Forecasting, said in a statement. … “The number of applications for purchases increased in the last week, but the average loan size has dropped to its lowest level since January 2021.”
This week’s data comes just a week after home mortgage applications dropped to their lowest level since January 2020.
Rising house prices, coupled with insufficient supply, continue to put pressure on the housing market.
“We continue to see the ebb and flow as demand for housing remains strong but stocks for sale remain low,” Kahn said. “However, lower rates may help some home buyers complete their purchases, especially first-time home buyers.”
Evan Sully reporting; Edited by Leslie Adler