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(Reuters) – U.S. home loan costs hit a record low last week, spurring a surge in applications for both home purchase loans and mortgage refinancings, the Mortgage Bankers Association\\\’s weekly survey showed on Wednesday.
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The interest rate on a 30-year fixed-rate mortgage, the most popular U.S. home loan, dropped to 3.30% in the week ended June 12 from 3.38% the week before, the MBA said. Mortgage rates have dropped by around half a percentage point from earlier this year after the Federal Reserve cut interest rates to near zero to cushion the blow to the economy from the coronavirus pandemic.
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Overall mortgage applications rose 8% last week on the back of the drop in lending rates, the MBA said. Applications for a mortgage to buy a home rose to an 11-year high, and refinancing applications increased 10% to the highest since late April.
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“The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” Joel Kan, MBA\\\’s Associate Vice President of Economic and Industry Forecasting, said in a statement.
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(Reporting By Dan Burns; Editing by Andrea Ricci)
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