Demand for mortgages took a hit in the past week.

Requests for mortgage applications fell 4.2%, according to the Mortgage Bankers Association's weekly survey.

Interest in refinancing fell as well by 7% compared with the prior week.

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However, people still want to buy homes as the seasonally adjusted purchasing index increased by 2%, despite rising mortgage rates.

After a slow April, the demand for purchasing applications rose for the second time in three weeks.

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The average rate on a 30-year mortgage increased to 3.18% from 3.15% in the past week.

"Purchase applications increased for the second time in three weeks, rebounding after a rather weak April with mostly weekly declines', said Joel Kan, MBA’s associate vice president of economic and industry forecasting. "While purchase activity was around 4 percent lower than a year ago, the comparison is to last spring’s large upswing in activity as pandemic-related lockdowns lifted."

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"Demand is robust throughout the country, but homebuyers continue to be held back by the lack of homes for sale and rapidly increasing home prices," added Kan. 

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The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.

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https://www.foxbusiness.com/markets/mortgage-applications-fall-with-homes-in-short-supply

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