U.S. mortgage applications decline with a drop in refinancing

U.S. applications for home mortgages declined last week as refinancing dropped to its lowest level since February 2020 with fewer homeowners able to take advantage of lower rates during a holiday-shortened week.
The Mortgage Bankers Association (MBA) said on Wednesday its seasonally adjusted market index fell 3.1% in the week ending June 4 from a week earlier.This reflected a 5.1% decline in applications for refinancing and was 27% lower than the same week one year ago.
The purchase index increased 0.3% from a week earlier. The week's data included an adjustment for the Memorial Day holiday.
"Home-price growth continues to accelerate, driven by favorable demographics, the recovering job market, and economy, and housing demand far outpacing supply," Joel Kan, an economist at the MBA, said in a statement.
Surging home prices and limited supply has put a lid on home sales recently, and a record-low percentage of U.S. consumers believe now is a good time to purchase a home.
The average contract interest rate for traditional 30-year mortgages decreased to 3.15% last week from 3.17% the prior week.