Jump in purchase activity may be a sign that first-time homebuyers are finding options despite high prices, says MBA
US mortgage applications bounced back for the week ending August 06, with purchase applications rising for the first time in nearly a month.
Overall mortgage application volume increased 2.8% week over week, according to data from the Mortgage Bankers Association’s weekly survey. Refinance and purchase applications grew 3% and 2%, respectively.
“Rates slightly rose but remained below 3%, driven by an end-of-week increase in the 10-year Treasury yield following the positive July jobs report,” said Joel Kan, AVP of economic and industry forecasting at MBA. “Homeowners continue to respond to lower rates, with refinance activity climbing to the highest level since February 2021.”
Kan noted that the refinance share of loan counts was at 68%, compared to a 63.4% share for refinances by dollar volume, as purchase loans continue to see significantly higher loan sizes.
“The higher level of purchase activity last week was driven by more government purchase applications, including a 3.3% increase in FHA loans. With low for-sale inventory keeping home price appreciation in many markets at record highs, the jump in FHA purchase applications is potentially a sign that more first-time buyers are finding purchase options despite the high prices,” Kan said.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 2.99% from 2.97% a week ago.