NEW YORK (Reuters) - Bank of America saw an 80% jump in mortgage applications between January and March, its executive of consumer lending said, as buyers were tempted by increasing home inventory and lower long-term bond yield.

"We're seeing a steady increase in home buying activity, and it's beyond what we would normally see from a seasonality perspective," Matt Vernon, head of consumer lending at the second-biggest U.S. lender, told Reuters. "We've seen an 80% increase in our applications from January to now, and normally we would see around the 60% increase."The drop last fall in U.S. 10-year bond yields, which is a benchmark for mortgage rates, encouraged more buyers to return to the market, he said.

The yield dipped to about 3.6% in September, the lowest since June 2023, which pushed down the 30-year mortgage rate to 6.1% in early October. The interest rate on a 30-year mortgage is currently at 6.7%, still below the 7% a year earlier, according to LSEG's data based on the Mortgage Bankers Association's average fixed 30-year contract rate.

"We're seeing more inventory come into the market, which ultimately leads to some stability and ultimately growth from a mortgage perspective," BofA's Vernon said.

"With rates remaining steady or slowly declining, we are seeing more demand from a buyer perspective than we saw in the previous years."

Interest in mortgage refinancing is also picking up, but about 80% of the bank's mortgages currently have interest rates below 6%, so mortgage rates would have to slide further below that to spur more demand.

"Below 6% we would see very meaningful pickup from a rate perspective," he said.

U.S. existing home sales unexpectedly increased in February as rising supply pulled buyers back into the market.

A Reuters poll of property experts in February showed affordability in the U.S. housing market will improve modestly in the coming year, based on expectations for a few more interest rate cuts, not an increase in homes available to purchase.

Mortgage lender UWM Holdings also expects higher demand for new mortgages and refinancing, Chief Strategy Officer, Alex Elezaj told Reuters.

"People are feeling, in general, good about the economy, I feel like they think that things have stabilized obviously post-election," he said.

"People are realizing... rates could go up, they could go down, but it's still a good time for me to explore what my options are."

UWM projects it will originate $28 billion to $35 billion in mortgages and refinancing originations in the first quarter, up from $27.6 billion a year earlier.

The company hired more employees to handle the projected surge in business. Its headcount swelled to 9,100 by the end of 2024, from around 6,700 a year earlier, it said.

"We are operationally prepared across the board to handle pretty much double the volume," Elezaj said.