Mortgage applications climbed last week as rates eased

US mortgage applications for both home purchases and refinancing increased for the first time in four weeks, helped by a slight decline in financing costs.

An index of applications for home purchases jumped 11.1%, the most since January, while a gauge of refinancing increased at a similar rate, according to Mortgage Bankers Association data released Wednesday.

The contract rate on a 30-year mortgage fell 5 basis points to 6.84% in the week ended May 2. The rate on five-year adjustable mortgages increased, but remained below where it was mid-April.

Mortgage rates track US Treasury yields, which declined for most of last week before rebounding Friday after a government report showed resilience in the labor market. Investors will parse comments later this afternoon from Federal Reserve Chair Jerome Powell and whether he signals that officials are firm in their stance for patience on interest rates.

While consumers are concerned that US trade policy will spark another bout of faster inflation and a weakening in the job market over the coming year, recent data suggest an underlying appetite for homes. March new-home sales exceeded estimates and contract signings on previously owned houses climbed by the most in more than a year.

The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.