U.S. applications for home mortgages rose last week following three consecutive weeks of declines as purchase activity rebounded despite a limited supply of houses for sale.
The Mortgage Bankers Association (MBA) said on Wednesday its seasonally adjusted market index rose 4.2% in the week ending June 11 from a week earlier. This reflected a 5.5% increase in applications for refinancing.
Last week, refinancing dropped to its lowest level since February 2020 as fewer homeowners were able to apply during a work week shortened by the Memorial Day holiday.
The purchase index increased 1.6% from a week earlier.
“An almost 5 percent increase in government purchase applications drove most of last week’s gain while also tempering the recent growth in loan sizes,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
“Purchase applications were still down 17 percent from a year ago, which was when the mortgage market started seeing large post-shutdown increases in activity.”
The average contract interest rate for traditional 30-year mortgages decreased for the third consecutive week to 3.11% from 3.15% the prior week, the lowest since early May.