Lower mortgage rates are boosting interest in buying a home.
Demand for mortgage applications increased 1.6% in the past week, according to the Mortgage Bankers Association's weekly survey.
That demand also saw the seasonally adjusted Purchase Index increase 3% from one week earlier.
"Treasury yields fell last week, as investors continue to anxiously monitor if the rise in COVID-19 cases in several states starts to dampen economic activity," said Joel Kan, MBA’s associate vice president of economic and industry forecasting. "Mortgage rates slightly declined as a result, with the 30-year fixed rate decreasing for the first time in three weeks."
The rate for a 30-year fixed-rate mortgage decreased to 3.03% from 3.06%.
The Refinance Index increased 1% from the previous week and was 3% higher than the same week one year ago, reaching the highest level since early July.
"There was also some easing in average loan sizes, which is potentially a sign that more first-time buyers looking for lower-priced homes are being helped by the recent uptick in for-sale inventory for both newly built homes and existing homes," added Kan.
The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.