US Economy News Today: Mortgage Applications Tumble During Memorial Day Week

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Government-Backed Mortgages Lead Demand During Holiday-Shortened Week

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In results adjusted for the Memorial Day holiday, mortgage applications dropped 5.2% last week, as increasing interest in government-backed housing loans wasn’t able to offset declines in demand for standard mortgage loans, according to Mortgage Brokers Association data.

The declining demand comes as mortgage rates ticked upward for a second week, with the 30-year fixed-rate mortgage coming in at 7.07%, reaching its highest levels in a month.  Purchase activity declined 4% during the holiday week, while refinancing was down 7%. However, the share of both Veterans Administration (VA) and Federal Housing Administration (FHA) loans increased

“Government purchase volume was down less, helped by growth in VA applications. The market is relying on first-time homebuyer demand, and many first-time buyers do use government lending programs,” said Mike Fratantoni, senior vice president and chief economist at MBA.

-Terry Lane