The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 6.75% from 6.73% last week, but that increase didn’t dissuade new borrowers. Instead, applications for a mortgage to purchase a home rose 3%, the third straight week of small but steady gains, according to CNBC.
Purchase applications are still down 21% year-over-year, but as demand for new-home construction rises amid a shortage of existing homes for sale, mortgage demand is following closely behind.
“New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market,” said Joel Kan, MBA’s vice president and deputy chief economist, in a release. “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.”
Advertisement
Related Stories
Economics
Mortgage Rate Declines Could Boost Home Sales Following Months of Low Activity
Encouraging economic news bumped mortgage applications up by 2.6% for the week ending May 3
Affordability
American Families Are Spending a Quarter of Their Income on Mortgage Payments
The average monthly mortgage payment is up more than 9% year-over-year
Affordability
Is Fractional Homeownership Any Kind of Solution for Housing Attainability?
The imbalance between housing supply and demand is spurring some innovative options within the real estate industry