July 8 (UPI) -- Mortgage applications to purchase a home rose a seasonally adjusted 5 percent for the week ending July 3 compared with the previous week and were 33 percent higher than 2019, according to new data from the Mortgage Bankers Association index released Wednesday.
The market appeared to have rebounded from a short downward trend in June as potential homebuyers continued to take advantage of record-low mortgage rates.
Mortgage applications overall increased 2.2 percent for the week. According to the MBA's Weekly Mortgage Applications Survey, its refinance index increased 0.4 percent and is 111 percent higher than this time last year.
"Mortgage rates declined to another record low as renewed fears of a coronavirus resurgence offset the impacts from a week of mostly positive economic data, such as June factory orders and payroll employment," Joel Kan, MBA's associate vice president of economic and industry forecasting, said in a statement.
Kan said the 30-year fixed rate dropped to 3.26 percent, which is down 53 basis points since late March.
"Borrowers acted in response to these lower rates, after accounting for the July 4th holiday," Kan said. "The average purchase loan size increased to $365,700 -- also another high -- as borrowers contend with limited supply and higher home prices."
The MBA said the refinance share of mortgage activity decreased to 60.1 percent of total applications from 61.2 percent the previous week.
Matthew Graham, chief operating officer at Mortgage News Daily said predictions on how long mortgage rates will remain low are unknown.
"What I can say is that a lot of us who watch the market very closely are on high alert for signs that the low rate environment is under imminent threat," Graham said. "While that could change with even one major coronavirus headline, we're not seeing that threat as of today."