July 14 (Reuters) – The number of home loan applications rose last week due to an increase in refinancing activity and an increase in buying activity amid falling mortgage rates.
The Mortgage Bankers Association (MBA) announced on Wednesday that its seasonally adjusted market index was up 16.0% for the week ended July 9, compared to the previous week. This reflected a 20.4% increase in existing loan refinancing requests and an 8.3% increase in home ownership requests.
The average contract rate on traditional 30-year mortgages fell to 3.09% last week, its lowest level since February, from 3.15% the previous week. This week’s dates included an adjustment for the July 4th holiday.
“Perhaps there was a delayed spillover of requests from the previous week when rates also fell, but there hasn’t been a huge response to refinance requests,” said Joel Kan, associate vice president of economic and industry forecasting at MBA, in a statement. “Purchase requests increased 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 finance applications fell to their lowest level since January 2020. read more
Rising home prices combined with insufficient supply have continued to weigh on the housing market.
“We continue to see ups and downs as residential demand remains strong but inventory for sale remains low,” said Kan. “However, lower interest rates can help some home buyers complete their purchases, especially first-time home buyers.”
Reporting from Evan Sully; Editing by Leslie Adler
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