By Evan Sully
(Reuters) – US home mortgage applications declined the most in nearly five months driven by sharp declines in refinancing activity and purchase applications.
The Mortgage Bankers Association (MBA) said Wednesday that its seasonally adjusted market index fell 6.9% in the week ending June 25 from the previous week, the biggest drop since early February. This reflected an 8.2% decrease in applications to refinance existing loans and a 4.8% drop in applications to buy a home.
The average contract interest rate for traditional 30-year mortgages increased to 3.20% last week from 3.18% the previous week.
“Applications to purchase conventional loans fell last week to the lowest level since last May,” said Mike Fratantoni, senior vice president and chief economist at MBA, in a statement. “Average loan sizes for total purchase applications increased, indicating that first-time home buyers, who tend to borrow smaller loans, are likely to be pushed out of the market due to a lack of entry-level housing. entry for sale “.
Both new and existing home sales have fallen dramatically this year due to a shortage of homes on the market.
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