With the 30-year fixed mortgage rate falling for the second straight week, mortgage applications rose, though just barely, for the second consecutive week, the Mortgage Bankers Association (MBA) said Wednesday.
According to the MBA’s Weekly Mortgage Applications Survey for the week ended June 16, the Market Composite Index — a measure of mortgage loan application volume — increased 0.5% on a seasonally adjusted basis from the previous week. On an unadjusted basis, the index decreased 1% from the previous week.
The increase was led by the seasonally adjusted Purchase Index, which increased 2% from a week earlier. Unadjusted, however, the Purchase Index dipped 0.1% from the previous week and was 32% lower than the same week last year.
The Refinance Index decreased 2% from the previous week and was 40% lower than the same week one year ago, the MBA said.
“The 30-year fixed mortgage rate declined for the third consecutive week to 6.73%, while other mortgage rates saw mixed results,” said Joel Kan, MBA’s vice president and deputy chief economist. “Purchase applications increased, driven by a 2% gain in conventional purchase applications and a 3% increase in FHA purchase activity.”
Low Inventory Constrains Sales
Kan said first-time homebuyers account for a large share of FHA purchase loans, and the increase is a sign that while buyer interest is there, activity continues to be constrained by low levels of affordable inventory. “Refinance applications continued their decline after the previous week’s increase, with the refinance share of applications just below 27%,” he said.
“The rate for jumbo loans exceeded the conforming rate for the second straight week,” Kan added. “The last time jumbo rates were higher was in December 2021.Tighter liquidity conditions have prompted jumbo lenders to pull back, increasing rates in the process.”
The refinance share of mortgage activity decreased to 26.9% of total applications from 27.3% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.3% of total applications.
The FHA share of total applications increased to 13.3% from 13% the previous week. The VA share of total applications decreased to 11.9% from 12.6% the week prior. The USDA share of total applications slipped to 0.4% from 0.5% the week prior.
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 6.73% from 6.77%, with points decreasing to 0.64 from 0.65. 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 6.8% from 6.79%, with points decreasing to 0.49 from 0.5. The effective rate remained unchanged from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.74% from 6.7%, with points decreasing to 1.03 from 1.14. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 6.26% from 6.25%, with points decreasing to 0.71 from 1.05. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs increased to 6.09% from 5.9%, with points increasing to 1.4 from 1.17. The effective rate increased from last week.
The 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.
