The Mortgage Bankers Association (MBA) reported a significant increase in the number of applicants for mortgage loans in the United States last week, following a drop in mortgage interest rates.
According to the MBA, the number of applicants for mortgage loans rose by 7% last week, with a 15% increase in the number of people applying for refinance loans. However, the number of refinance loan applicants is still down 77% year-over-year.
The number of applicants for home equity loans also increased by 3% last week, but was down 39% year-over-year.
The average interest rate for 30-year fixed-rate mortgages with conforming loan balances of $726,200 or less decreased to 6.20% from 6.23% the previous week. This drop in interest rates is likely to have played a major role in the recent surge in mortgage loan applications.
The MBA’s report is seen as a positive sign for the housing market, which has been hit hard by the economic fallout from the COVID-19 pandemic. The increase in loan applications suggests that more Americans are feeling financially secure enough to make a significant investment in homeownership.