Mortgage rates dropped for the third straight week, boosting demand from both homeowners and home buyers. The spring housing market had been looking like a letdown, but there appears to now be new life.
Total mortgage application volume rose 7.9% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, decreased to 6.35% from 6.42%, with points decreasing to 0.61 from 0.62, including the origination fee, for loans with a 20% down payment.
“Mortgage rates declined last week as financial markets responded positively to the Middle East ceasefire and the lower trend in oil prices,” said Mike Fratantoni, MBA’s SVP and chief economist in a release.
Applications for a mortgage to purchase a home rose 10% for the week and were 14% higher than the same week one year ago. This, after buyer demand had briefly sunk below year-ago levels. The increase was led by conventional purchase loans, up 11% over the week.
