Mortgage applications rose 4.2% over the past week following three consecutive weeks of declines, due in part to dropping mortgage and refinance rates, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week of June 7-11, 2021.
The rise in applications was predominantly due to an uptick in mortgage refinancing. Mortgage purchase applications grew 2% from the previous week while mortgage refinancing applications jumped 6% over the same time period.
With current mortgage rates still hovering near historic lows, it's a smart financial move to take out a new mortgage or refinance your current mortgage. Visit Credible to compare rates across multiple lenders at once without affecting your credit score.
More Americans are buying, refinancing homes thanks to low mortgage rates
"Both purchase and refinance applications were up, including a 5.5% gain in refinances," Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting, said in a statement. "The jump in refinances was the result of the 30-year fixed rate falling for the third straight week to 3.11% — the lowest since early May."
In fact, mortgage rates were down across the board over the past five weeks, according to data from Credible.
The MBA survey suggests that it's still a popular time to take out or refinance a mortgage. If you're shopping for a mortgage, it's important to compare rates across multiple mortgage lenders at once to ensure you get the lowest rate for your situation. You can preview mortgage rates from mortgage lenders in the table below, and get pre-approved for a mortgage in just three minutes on Credible.
Refinancing demand is outpacing the need for new mortgages
The share of mortgage activity was comprised mostly of refinancing applications, the MBA survey found. The portion of refinances relative to total mortgage applications was 61.7%, up from 60.4% the previous week. With refinance rates low and home values high, it may be possible to pay off your mortgage faster, save money on your monthly payments, or tap into your high home equity by refinancing.
Curious about mortgage refinancing? See how much a lower rate could save you by using Credible's mortgage payment calculator.
Despite low housing supply, mortgage purchases are rising, too
The demand for homes is at an all-time high, and many buyers are facing stiff competition in the housing market due to low supply. Still, mortgage purchase activity increased 2% over the previous week, signaling that there's still interest in taking out a new home loan.
"Purchase activity also rebounded, even as supply constraints continue to slow the housing market," Kan said.
Getting a mortgage is the easiest part of buying a home right now — the challenge comes with having your offer accepted. It helps to come prepared with a mortgage preapproval letter, which shows sellers that you're ready to move. Get in touch with an experienced loan officer at Credible for help during the home loan process.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at email@example.com and your question might be answered by Credible in our Money Expert column.