After four consecutive weeks of decreases, mortgage application volume increased last week as both purchase and refinance volume rose from a week earlier, the Mortgage Bankers Association (MBA) said Wednesday.
The Market Composite Index — a measure of mortgage loan application volume — jumped 7.2% on a seasonally adjusted basis from a week earlier, according to data from the MBA’s Weekly Mortgage Application Survey for the week ended June 9.
Unadjusted, the index increased 18% from the previous week.
The Refinance Index increased 6% from the previous week, but was still 41% lower than the same week last year.
The seasonally adjusted Purchase Index increased 8% from a week earlier. Unadjusted, the index increased 17% from the previous week but remained 27% lower than the same week last year.
Rates Decline
“Mortgage rates declined for the second straight week, with the 30-year fixed rate decreasing to 6.77%,” said Joel Kan, MBA’s vice president and deputy chief economist. “Rates that are still more than a percentage point higher than a year ago, and low for-sale inventory, continue to constrain homebuying activity in many markets. The average loan size on a purchase loan decreased for the third straight week, as we continue to see more first-time homebuyer activity in the purchase market.”
Kan noted that refinance applications accounted for less than a third of all applications and remained more than 40% behind last year’s pace.
“Elevated rates have reduced the benefit of a rate/term refinance for many borrowers and continue to discourage cash-out refinances as borrowers are unwilling to give up their lower rates,” he said.
The refinance share of mortgage activity remained unchanged from the previous week at 27.3% of total applications. The adjustable-rate mortgage (ARM) share of activity decreased to 6.5% of total applications, the MBA said.
The FHA share of total applications slipped to 13% from 13.2% a week earlier. The VA share of total applications ticked up to 12.6% from 12.5% the week prior. The USDA share of total applications also increased slightly, to 0.5% from 0.4% a week earlier.
Mortgage Rates
Note: The points listed include the origination fee and are for 80% loan-to-value (LTV) ratio loans.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.77% from 6.81%, with points decreasing to 0.65 from 0.66. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 6.79% from 6.74%, with points decreasing to 0.5 from 0.56. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.7% from 6.73%, with points decreasing to 1.14 from 1.15. The effective rate decreased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 6.25%, with points increasing to 1.05 from 0.62. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs decreased to 5.9% from 5.93%, with points increasing to 1.17 from 0.96. The effective rate increased from last week.
The MBA’s survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.
