By Evan Sully
(Reuters) - Mortgage applications rose last week as the key 30-year mortgage rate held below 3% for a second straight week.
The Mortgage Bankers Association (MBA) said on Wednesday its average contract interest rate for traditional 30-year mortgages inched up to 2.99% from 2.97% in the week ending Aug. 6. The seasonally adjusted market index tracking mortgage applications rose 2.8% from a week earlier, the MBA said.
"Homeowners continue to respond to lower rates, with refinance activity climbing to the highest level since February 2021," Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
After hitting record lows late last year below 2.9%, mortgage rates climbed in the first part of this year and peaked in the spring. Rates have been drifting lower since, held down in large part by the U.S. Federal Reserve's extraordinary stimulus measures aimed at helping the economy rebound from the coronavirus pandemic.
The MBA's mortgage market index rise reflected a 3.2% increase in applications to refinance existing loans, while purchase applications rose 1.8%.
"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," Kan said.