Mortgage applications picked up last week, according to the most recent numbers put out by the Mortgage Bankers Association, offering optimism for a real estate market that has been facing a prolonged period of economic uncertainty.
The Mortgage Bankers Association’s weekly Mortgage Composite Index showed applications up a seasonally adjusted 12.5% from the week before, the first week-over-week increase in a month. The survey, which measures loan application volume across the country, showed that applications for both refinancing and new home purchases were up for the week ending June 6.
Buyers seemed undeterred even by a slight uptick in mortgage rates during the period, with the average 30-year fixed rate rising one basis point to 6.93% from the week before. Applications for refinancing were up 16% from the week before while new purchase applications were up a seasonally adjusted 10%. Compared to the same period last year, refinancing applications have jumped 28% while purchase applications were up 20%.
That increase comes as some cities, particularly in the South and West, are seeing more available inventory. It’s a positive sign for a market that has seen many buyers hold back from making major purchases.
“Despite ongoing uncertainty surrounding the economy, homebuyers seem to be taking advantage of loosening housing inventory in certain markets,” said Joel Kan, MBA’s vice president and deputy chief economist, in a press release.
Borrowers showed an increased appetite for refinancing as that share of applications increased 35.2% to 36.7% of total applications. The share of adjustable-rate mortgages also increased to 7.2% of the total. Meanwhile, interest rates for FHA and 15-year fixed-rate loans both fell. The average contract interest rate for FHA-backed loans fell 8 basis points to 6.60% while the rate for 15-year fixed rate mortgages fell 9 basis points to 6.16%.
The report hints at a reprieve for an industry facing headwinds. Last month saw large numbers of buyers choosing to cancel their purchases as well as the worst April for home sales since 2009. But in keeping with the MBA applications report, a Fannie Mae survey on consumer sentiment released this week recorded an increased sense of optimism, with positive purchase sentiment up by seven percentage points from April and 24 percentage points when compared to May 2024.
