Applications for home loans rose last week, though concerns about supply and the economy linger.
The volume of applications to purchase homes rose by 2 percent, seasonally adjusted, compared to the week prior.
The metric, known as the purchase index, is tracked in the Mortgage Bankers Association’s weekly survey of 75 percent of the residential mortgage market. The index saw declines in the final weeks of July, but year over year is up 22 percent, according to Joel Kan, MBA’s head of forecasting. It’s the twelfth consecutive week that the purchase index has reported annual gains.
The 30-year fixed-rate mortgage rates also hit a record low in the history of MBA’s weekly survey, which has been running since 1990 for both conforming and jumbo balances. The 30-year rate for loans under $510,400 fell to 3.06 percent from 3.14 percent the week prior, as jumbo rates sank to 3.40 percent from 3.51 percent.
The low rates drove an increase in refinancing. MBA’s refinance index surged 9 percent, adjusted, compared to the previous week, and up 47 percent year over year.
Refinancing accounted for 66 percent of MBA’s surveyed applications during the first week of August. That was the highest level of refinance activity since April, according to Kan.
MBA’s overall index of all home mortgage applications increased an adjusted 6.8 percent over the final week of July.
Still, Kan cautioned that “the gradual slowdown in the improvement in the job market and tight housing inventory remain a concern for the coming months.”
Write to Erin Hudson at [email protected]