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Mortgage application activity enjoyed a healthy boost last week, due primarily to a vibrant burst of refinancing applications.
According to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 1, the Market Composite Index jumped 14.2 percent on a seasonally adjusted basis and 14 percent on an unadjusted basis from one week earlier. But those increases could not be credited to purchase activity—both seasonally adjusted and unadjusted Purchase Index increased four percent from one week earlier.
Instead, the Refinance Index saw the greatest gains, with a 21 percent spike from the previous week. The Refinance Index hit its highest level since January 2015 while the refinance share of mortgage activity increased to 61.6 percent of total applications, the highest level since February 2016, from 58.1 percent the previous week.
“Interest rates continued to drop last week as markets assessed the impact of Brexit, downgrading the likelihood of additional rate hikes by the Fed, and mortgage rates for 30-year conforming loans dropped to their lowest level in over three years,” said Mike Fratantoni, MBA’s chief economist.
As for the government home loan programs, both the FHA share and USDA share of total applications decreased over the past week while the VA share of total applications saw a slight increase.