Mortgage applications in the United States rise, purchase requests at 3-month low – MBA

FILE PHOTO: Houses are under construction in Mount Laurel, New Jersey, USA, May 15, 2021. REUTERS / Andrew Kelly

(Reuters) – Mortgage applications in the United States surged last week following a pickup by homeowners looking to refinance their loans, but applications for loans to buy a home fell to their lowest level for three months in a context of acute housing shortage which drives up prices.

The Mortgage Bankers Association (MBA) said on Wednesday that its seasonally adjusted buying index rose 1.2% from the previous week, reflecting a 4% increase in refinancing requests. Refinancing activity has increased in recent weeks as mortgage interest rates have retreated from their recent highs.

The buying index fell 4% from the previous week to its lowest level since February, which could signal further headwinds for home sales in the coming months.

“A decline in purchase requisitions has been observed for both conventional and government loans,” Joel Kan, MBA economist, said in a statement. “There is still a strong demand for buying a home, but persistent supply shortages limit purchases, and building material shortages and higher costs make it more difficult to increase the cost. offer.”

The housing market has been a strong economic player throughout the COVID-19 recession, which began in February 2020. But supply constraints are slowing momentum. Sales of existing homes in the United States fell to their seven-month low in March, but may have leveled off in April, according to data due Friday.

The average contractual interest rate for traditional 30-year fixed-rate mortgages rose to 3.15% last week from 3.11% the week before, but rates remain about 20 basis points lower than their recent highs in early April.

“Despite still relatively low rates, scarcity of inventory and soaring house prices are eroding affordability and putting home buying out of reach for many households,” said Lydia Boussour, senior economist at Oxford Economics in New York.

Reporting by Evan Sully; Editing by Dan Burns and Andrea Ricci

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