Mortgage applications in the US rebounded last week as both refinancing and purchase activity picked up, the Mortgage Bankers Association said Wednesday.
The market composite index, which measures loan application volume, climbed 11% in the week ended Friday on a seasonally adjusted basis, compared with the prior week's 2.5% decline. On an unadjusted basis, applications increased 21%.
"Both refinance and purchase applications rebounded coming out of the Memorial Day holiday week," said Mike Fratantoni, the MBA's chief economist.
The refinance index advanced 15% from the prior week and gained 20% from a year earlier. The seasonally adjusted purchase index rose 7% from a week earlier. Without adjustments, the index increased 17% from the previous week and 4% from a year earlier.
The average interest rate for 30-year fixed mortgages with conforming loan balances of $832,750 or less climbed to 6.6% from 6.57% a week earlier. For loan balances higher than that amount, the rate remained unchanged at 6.66%. For 15-year loans, the rate rose to 5.99% from 5.93%.
"Mortgage rates were volatile last week as news from the Middle East continues to drive markets," Fratantoni said. "While the average rate was up slightly, with the 30-year fixed rate now at 6.6%, there were opportunities where borrowers were seeing somewhat lower rates."
Early Wednesday Iran reportedly launched strikes against several US military facilities and bases in Bahrain, Jordan and Kuwait. The conflict is in its 15th week.
Fixed-rate mortgages with 30-year terms backed by the Federal Housing Administration edged up to 6.27% from 6.26% a week earlier. The share of FHA loans, which are often used by first-time home buyers and can involve smaller down payments, rose to 17.4% of total applications from 17%.