US mortgage rates edge down to 6.51%, MBA says

April 8 (Reuters) - The interest ‌rate on ​the ​most popular U.S. home loan ticked down last week for the first time since the start ‌of the Iran war, but not enough to ⁠rejuvenate a housing market that's pricing out many buyers with a combination ‌of elevated borrowing costs and ‌expensive homes.

The Mortgage Bankers Association said on Wednesday the contract rate on a 30-year, fixed-rate mortgage fell 6 ​basis points to 6.51% for the week ended April 3, retreating from the seven-month high hit the ⁠prior week.

Even so, refinance applications sank 2.8%, and purchase applications, while up about ​1% from the previous week, were 7% lower than a year ago, the MBA said.

Mortgage rates ​have climbed by 42 basis points ‌since the United States and Israel launched the war on February 28, driving up yields ⁠on the Treasury bonds lenders use to set mortgage rates.

Besides raising the cost of loans, the Iran war has also ⁠hit consumers' daily budgets with the surge in fuel prices.

Housing affordability has ​been a key political issue for the Trump Administration, which is readying what it says will be a "major housing announcement" on Wednesday.

Earlier ‌this year President Donald Trump proposed banning institutional investors from buying single-family homes and told ‌Fannie Mae and Freddie Mac - the government-controlled entities that ⁠back the majority of ‌U.S. home loans - to ​purchase $200 billion in mortgage-backed securities to push down borrowing rates.

(Reporting by Ann Saphir; editing by David ‌Gaffen)

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