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Purchase mortgage applications across the country rose last week, while the share of mortgages in forbearance has dropped, according to the Mortgage Bankers Association’s latest surveys.

The MBA’s seasonally adjusted Purchase Index, part of its Weekly Mortgage Applications Survey, showed that purchase mortgage applications for the week ending July 3 increased 5 percent from one week earlier. The results included an adjustment for the July Fourth holiday. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 33 percent higher than the same week one year ago.

“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. The 30-year fixed rate slipped to 3.26 percent – down 53 basis points since late March. Borrowers acted in response to these lower rates, after accounting for the July Fourth holiday,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “Purchase applications continued their recovery, increasing 5 percent to the highest level in almost a month and 33 percent from a year ago. The average purchase loan size increased to $365,700 – also another high – as borrowers contend with limited supply and higher home prices.”

The Refinance Index increased 0.4 percent from the previous week and was 111 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 60.1 percent of total applications from 61.2 percent the previous week.

Overall, the Market Composite Index, a measure of mortgage loan application volume, increased 2.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 8 percent compared with the previous week.

In another survey released this week, the MBA’s latest Forbearance and Call Volume Survey showed that the total number of loans in forbearance decreased from 8.47 percent of servicers’ portfolio volume in the prior week to 8.39 percent for the week ending June 28. The MBA estimates that almost 4.2 million homeowners are in forbearance plans.

Mike Fratantoni, MBA’s senior vice president and chief economist, said in a statement that some homeowners exiting forbearance were seeking other forms of relief.

“Looking at the mix of loans that are exiting forbearance, we are seeing a higher share exiting into deferral options and modifications, and somewhat fewer simply opting out of a forbearance plan,” Fratantoni said.

The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the fourth week in a row to 6.17 percent, a 9-basis-point improvement. Ginnie Mae loans in forbearance decreased 11 basis points to 11.72 percent. The percentage of loans in forbearance for depository servicers dropped to 9.03 percent, while the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased to 8.33 percent.

“We learned last week that the job market improved more than expected in June. With that as background, it is not surprising that the forbearance numbers continue to improve as more people go back to their jobs,” Fratantoni said. “The improvement in the forbearance data was broad-based, with declines for both GSE and Ginnie Mae loans. The decrease in new forbearance requests indicates that further declines are likely in the weeks ahead.”