After falling steadily for a month, demand for mortgages to purchase a home rose slightly last week.
Coupled with a continued increase in refinancing, total mortgage application volume rose 2.8% for the week, according to the Mortgage Bankers Association’s seasonally adjusted index.
Mortgage applications to purchase a home rose 2% for the week but were still 18% lower than a year ago. Buyers are contending with high prices and limited supply, although more residences are slowly coming onto the market. The type of loan now seeing higher demand is telling.
“The higher level of purchase activity last week was driven by more government purchase applications, including a 3.3% increase in FHA loans,” said Joel Kan, an MBA economist. “With low for-sale inventory keeping home price appreciation in many markets at record highs, the jump in FHA purchase applications is potentially a sign that more first-time buyers are finding purchase options despite the high prices.”