The average home acquisition loan inched a little bit closer to $400,000 last week while overall purchase volume lagged. But lower interest rates drove refinancing activity.
An index tracking the volume of applications to buy homes was unchanged last week, ticking up a slight 0.1 percent, seasonally adjusted, from the previous week, according to the Mortgage Bankers Association’s survey.
The metric, known as the purchase index, had dropped 4 percent the prior week. But the loan size requested by applicants rose to another historic high. The average purchase loan size was $398,600, up from $395,200 the week before.
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Meanwhile, an index tracking mortgage applications to refinance homes surged 11 percent last week, compared to the week prior. Refinancing accounted for more than 71 percent of the total applications for home loans last week.
Joel Kan, MBA’s head of industry forecasting, attributed that to mortgage rates dropping three basis points.
“The one-week reversal in the recent upswing in rates drove an increase,” he said in a statement.
The average rate for a 30-year, fixed-rate mortgage was 2.92 percent last week, down from 2.95 percent the previous week. The rate for jumbo loans was 3.12 percent, a four basis point drop from 3.17 percent before.
Kan attributed the virtually unchanged number of requests to buy homes to rising prices, a strong pace of sales and tight housing inventory.
MBA’s weekly survey covers 75 percent of the residential mortgage market and has been running since 1990.