U.S. mortgage applications decrease by most in nearly five months -MBA

[June 30, 2021]    By Evan Sully

(Reuters) - U.S. applications for home mortgages decreased by the most in almost five months driven by sharp declines in refinancing activity and purchase applications.

A "For Sale" sign is posted outside a residential home in the Queen Anne neighborhood of Seattle, Washington, U.S. May 14, 2021. REUTERS/Karen Ducey

The Mortgage Bankers Association (MBA) said on Wednesday its seasonally adjusted market index fell 6.9% in the week ending June 25 from a week earlier, the largest drop since early February. This reflected an 8.2% decrease in applications for refinancing existing loans and a 4.8% drop in applications to purchase a home.

The average contract interest rate for traditional 30-year mortgages increased to 3.20% last week from 3.18% the prior week.

"Purchase applications for conventional loans declined last week to the lowest level since last May," Mike Fratantoni, MBA’s Senior Vice President and Chief Economist, said in a statement. "The average loan size for total purchase applications increased, indicating that first-time homebuyers, who typically get smaller loans, are likely getting squeezed out of the market due to the lack of entry-level homes for sale."

Both new and existing home sales have fallen sharply this year due to a shortage of houses on the market.

(Reporting by Evan Sully; Editing by Dan Burns)

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