Mortgage Applications Rise After Hope of Iran Peace Deal Drove Brief Dip in Rates

Mortgage applications to purchase and refinance a home both rose last week, when hopes of a deal to end the Iran war drove a brief dip in mortgage rates, according to the Mortgage Bankers Association.For the week ending Aug. 7, MBA's Market Composite Index—a measure of total mortgage loan application volume—rose 3.6% on a seasonally adjusted basis from one week earlier.The Purchase Index, deemed a leading indicator for home sales, rose 3% week over week on a seasonally adjusted basis, but was down 1% from a year earlier. Refinance activity gained 5% on the week and was down 22% annually.“After five consecutive weeks of increases, mortgage rates declined slightly last week as oil prices dipped briefly on the hopes of a sustained resolution to the war in Iran," says MBA Deputy Chief Economist Joel Kan. "The reprieve in rates supported an increase in both purchase and refinance applications over the week, although the pace of applications has fallen below last year’s pace in recent weeks."Mortgage rates have closely followed oil prices in recent months, amid concerns that soaring energy costs could drive a sustained increase in inflation. Last week, rumors of a peace deal to reopen th...