Mortgage applications increased for the first time in several weeks as mortgage rates trended lower last week.
The Mortgage Bankers Association (MBA) announced applications increased 15.6% the week ending June 7, according to its Weekly Applications Survey.
This comes after several weeks of decreases in the survey, which tracked loan applications falling by 5.2% the week prior, and 5.7% the week ending May 24. The last increase was the week ending May 17, when application volume rose by 1.9%.
Mortgage rates have wavered between 6.94% and 7.07% throughout the same timeline.
“Mortgage rates were trending lower over the course of last week until a stronger than anticipated employment report resulted in a bounce back, with the weekly average for the 30- year fixed mortgage rate decreasing to 7.02 percent,” said MBA Senior Vice President and Chief Economist Mike Fratantoni. “Lower rates earlier in the week meant a strong increase in refinance activity, particularly for VA borrowers, who jumped on the chance to lower their rates. Overall refinance activity was more than 27 percent above one year ago.”
The Market Composite Index, a measure of mortgage loan application volume, increased 15.6% week over week on a seasonally adjusted basis, and 26% on an unadjusted basis.
The Refinance Index increased 28% from the previous week and was 28% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 9% from one week earlier and 19% on an unadjusted basis. Also unadjusted, it was 12% lower than the same week one year ago.
“On a seasonally adjusted basis and compared to the holiday-adjusted level from the prior week, purchase activity also increased,” Fratantoni pointed out. “Multiple data sources are now indicating that home inventory levels, while still historically low, are up significantly from last year at this time. This is good news for many prospective homebuyers who have been frustrated by the lack of homes on the market.”
The refinance share of mortgage activity increased to 35.2% of total applications from 31.1% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.3% of total applications. The FHA share of total applications decreased to 13.1% from 13.2% the week prior. The VA share of total applications increased to 14.7% from 12.1% the week prior. The USDA share of total applications increased to 0.4% from 0.3% the week prior.
