The volume of mortgage applications increased for the fourth consecutive week, thanks to a slight decline in mortgage rates, the Mortgage Bankers Association (MBA) said Wednesday.
According to the MBA’s Weekly Mortgage Application Survey for the week ended July 14, the Market Composite Index — a measure of mortgage loan application volume — increased 1.1% on a seasonally adjusted basis from the previous week. Last week’s results included an adjustment for Independence Day.
Unadjusted, the index increased 27% compared with the previous week, the MBA said.
The increase was led by the Refinance Index, which increased 7% from the previous week but was 32% below the same week last year.
The seasonally adjusted Purchase Index decreased 1% from a week earlier. Unadjusted, the Purchase Index increased 24% from a week earlier, but was 21% lower than the same week last year.
Refis Increased
“Mortgage rates declined last week, as markets responded positively to incoming data showing that U.S. inflation continues to cool,” said Joel Kan, MBA’s vice president and deputy chief economist. “Most rates in our survey declined, with the 30-year fixed rate falling to 6.87%.”
Kan noted that refinance applications increased 7%, but accounted for only 28% of applications overall and was more than 30% behind last year’s pace.
“Despite last week’s lower rates, purchase applications decreased, as home purchase activity is still being held back by low housing supply and rates that are still much higher than a year ago,” he said.
The refinance share of mortgage activity increased to 28.4% of total applications from 26.8% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.3% of total applications.
The FHA share of total applications ticked up to 13.6% from 13.3% the previous week. The VA share of total applications decreased to 12.1% from 12.6% the previous week. The USDA share of total applications inched up 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 6.87% from 7.07%, with points decreasing to 0.66 from 0.74. 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) decreased to 6.89% from 7.04%, with points increasing to 0.64 from 0.59. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.77% from 6.86%, with points decreasing to 1.12 from 1.23. The effective rate decreased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.36% from 6.42%, with points decreasing to 0.72 from 1.22. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs increased to 6.27% from 6.24%, with points decreasing to 0.91 from 1.42. The effective rate decreased 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. The base period and value for all indexes is March 16, 1990=100.
