Mortgage demand ticked up last week as interest rates declined for a second week in a row. Applications increased by 0.5% on a seasonally adjusted basis during the week ending May 10, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey.
“Treasury yields continued to move lower last week and mortgage rates declined for the second week in a row, with the 30-year fixed rate down 10 basis points to 7.08 percent, the lowest level since early April,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
Purchase loan application volume decreased by 2% from one week earlier, driven largely by a 9% drop in Federal Housing Administration (FHA) purchase loan applications.
Meanwhile, the decline in rates led to a small boost to refinance applications, driven by a strong week for U.S. Department of Veterans Affairs (VA) refinances. The MBA’s refinance index increased 5% from the previous week and was 7% higher than the same week one year ago. But the overall level of refinance activity remains low, Kan said.
“While the downward move in rates benefits prospective homebuyers, mortgage rates are still much higher than they were a year ago, while for-sale inventory remains tight,” Kan added.
The MBA survey showed that the average mortgage rate for 30-year fixed loans with conforming balances ($766,550 or less) decreased to 7.08%, down from 7.18% last week. And rates on jumbo loans (balances greater than $766,550) also decreased week over week to 7.22%, down from 7.31%.
On Wednesday, HousingWire’s Mortgage Rates Center showed the average 30-year fixed rate for conventional loans at 7.42%, down from 7.48% one week earlier.
