Although it wasn't the dramatic, 9.2% drop seen one week earlier, mortgage application volume continued to decrease during the week ending June 20, dropping 1%, on an adjusted basis, compared to the previous week, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, application volume decreased 2% compared with the previous week.
Refinance application volume fell 1% while purchase application volume also declined by the same amount. On an unadjusted basis, purchase application volume decreased 2% compared with the previous week and was 18% lower than the same week one year ago.
The refinance share of mortgage activity remained unchanged at 52% of total applications.
The ongoing slide in application volume comes despite the fact that mortgage rates are holding steady at historic lows.
The average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 4.33%, down from 4.36% the previous week.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 4.28%, down from 4.32% the week prior.
The average rate for a 30-year FRM backed by the Federal Housing Administration was 4.03%, down from 4.07% the previous week.
The average rate for a 15-year FRM was 3.47%, down from 3.50% the week prior.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.23%, up from 3.20% the previous week.
The ARM share of activity remained unchanged at 8% of total applications.
All of the MBA's quoted average rates are based on closings.
Freddie Mac's Primary Mortgage Market Survey also shows that rates dropped slightly during the week ending June 19. According to that report, the average rate for a 30-year FRM was 4.17%, down from 4.20% the week prior. A year ago at this time, the 30-year FRM averaged 3.93%.
The average rate for a 15-year FRM was 3.30%, down slightly from 3.31% the previous week. A year ago at this time, the 15-year FRM averaged 3.04%.
The average rate for a five-year Treasury-indexed hybrid ARM was 3.00%, down from 3.05% the week prior. A year ago, the five-year ARM averaged 2.79%.
The average rate for a one-year Treasury-indexed ARM was 2.41%, up slightly from 2.40% the week prior. At this time last year, the one-year ARM averaged 2.57%.
Zillow's Mortgage Rate Ticker, which is based on quoted rates, also shows the same trend: According to that index, the average rate for a 30-year FRM, during the week ending June 20, was 4.03%, down from 4.08% the previous week.
The average rate for a 15-year FRM was 3.0%, while the average rate for a 5-1 ARM was 2.79%, according to Zillow, which also tracks rates in real time.
‘Last week, mortgage rates remained stable as the Federal Open Market Committee's policy statement contained few surprises,’ said Erin Lantz, vice president of mortgages at Zillow. ‘With little anticipated economic news this week, we expect rates will remain steady, similar to the pattern they've held for the past few weeks.’
Zillow, however, was way off on its prediction for what the MBA's Weekly Mortgage Applications Survey would reveal: Zillow had predicted that the MBA's index would show an increase of about 7% from the previous week, with refinance application volume rising 27% and purchase application volume falling by about 2%.
‘We expect that the rise in refinance mortgage applications is likely due to a combination of low-enough interest rates to spur refinance activity and a rebound from the drop in applications the week prior,’ Lantz said.