Mortgage demand ticked up last week as interest rates declined for a third week in a row. Applications increased by 1.9% on a seasonally adjusted basis during the week ending May 17, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey.
The 30-year fixed mortgage rate declined for the third straight week, dropping to 7.01%, the lowest level in seven weeks, according to the MBA data.
“Rates coming down from recent highs spurred some borrowers to act, with increases across both conventional and government refinance applications,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
Purchase loan application volume decreased by 1% from one week earlier.
“Purchase activity continues to lag despite this recent decline in rates, down 11% from a year ago, as potential buyers still face limited for-sale inventory and high list prices,” Kan said.
Meanwhile, the decline in rates led to a small boost in refinance applications, driven by a strong week for U.S. Department of Veterans Affairs (VA) refinances, which posted a double-digit increase for the third consecutive week.
The MBA’s refinance index increased 7% from the previous week and was 21% higher than the same week one year ago. But the overall level of refinance activity remains low, Kan said.
The MBA survey showed that the average mortgage rate for 30-year fixed loans with conforming balances ($766,550 or less) decreased to 7.01%, down from 7.08% last week. And rates on jumbo loans (balances greater than $766,550) also decreased week over week to 7.18%, down from 7.22%.
On Wednesday, HousingWire’s Mortgage Rates Center showed the average 30-year fixed rate for conventional loans at 7.33%, down from 7.42% one week earlier.