The seasonally adjusted purchase index grew by 2% compared to the previous week. However, on an unadjusted basis, the index was down 10% compared to the previous week and 3% lower than the same time last year.
“Purchase applications increased over the week and are edging closer to last year’s levels. Despite the drop in rates, affordability challenges and other factors such as limited inventory might still be hindering purchase decisions,” said Kan.
The share of mortgage activity attributed to refinances increased slightly to 46.7% of total applications, up from 46.4% the previous week. FHA-backed loan applications, often used by first-time homebuyers, also saw a small increase, making up 14.7% of total applications, compared to 14.6% the week prior.
Adjustable-rate mortgage (ARM) activity continued to decline, falling to 5.4% of total applications, as borrowers increasingly opted for fixed-rate loans in the face of dropping rates. The share of VA loan applications decreased slightly to 16.4%, while USDA-backed loans remained unchanged at 0.4%.
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Source: mpamag.com