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Mortgage Rates, Purchase Activity Both Rise

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. But while rates moved to their highest level in months, mortgage application demand was relatively unaffected, increasing 0.2 percent week over week. Joel Kan, MBA’s vice president of economic and industry forecasting, says purchase activity helped balance decreasing refinance demand last week. “An increase in home purchase applications offset a slight decline in refinances,” Kan said. “The increase in purchase applications was welcome news, but was primarily driven by a 2 percent gain in conventional purchase applications, which kept the average loan size elevated.” Demand for loans to buy homes is now 10 percent lower than it was last year at the same time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)