May 10 (UPI) — With interest rates on home loans on the decline, the Mortgage Bankers Association said Wednesday that it saw an uptick in new applications compared with week-ago levels.

The MBA put the interest on a 30-year, fixed-term mortgage at 6.48%, down 0.2% from week-ago levels. That in turn led to a 6.3% increase in mortgage applications compared with last week.

Joel Kan, the deputy chief economist at the MBA, said lending rates dropped after the U.S. Federal Reserve hinted last week that it may pause its policy of aggressive rate hikes as consumer-level inflation declines.

Data this week, however, shows that inflation remains stubbornly high. Inflation for all consumer goods dipped below 5%, though a metric stripping out food and energy showed no change at all in inflation. Month-on-month, meanwhile, and consumer prices increased by 0.4%, compared with a 0.1% increase from February to March, suggesting the Fed might have more work to do to arrest inflation.

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