Mortgage applications rise for third straight week

Demand for home mortgages in the U.S. climbed again last week.

The Mortgage Bankers Association (MBA) said Wednesday that mortgage loan application volume jumped 3% compared with the prior week, according to its seasonally adjusted index.

The Purchase Index for the week ending June 23 also rose 3%, the MBA said. 

“Purchase applications increased for the third consecutive week to the highest level of activity since early May but remained more than 20% lower than year ago levels,” MBA deputy chief economist Joel Kan said in a statement. “New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market.”

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The Census Bureau and the Department of Housing and Urban Development reported Tuesday that the seasonally adjusted rate of new single-family home sales totaled 763,000 in May, representing a 12.2% increase from the prior month. It also estimated 428,000 new houses were on the market at the end of last month. 

Kan noted existing home sales “continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages.”

Overall, existing-home transactions saw a small increase, at 0.2%, between the months of April and May, with the seasonally adjusted annual rate coming in at 4.3 million, according to a recent report from the National Association of Realtors.

The MBA survey also reported a 3% week-over-week rise and a 32% year-over-year drop for its Refinance Index in the week ending June 23. Of all mortgage application activity, refinancing comprised 27.2% during that period. 

For 30-year fixed-rate mortgages “with conforming loan balances,” the contract interest rate averaged 6.75% for the week ending June 23, according to the MBA. It had been slightly lower, at 6.73%, the prior week.

The survey covers more than 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.