Mortgage application volume dipped 1.8% on an adjusted basis during the week ended June 26, as the average rate for a 30-year-fixed rate mortgage dipped to 3.29%, down from 3.30%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances fell 2% while applications for purchases decreased 1%.
The previous week, total applications decreased 8.7%. Two weeks ago, however, application volume had been on an incline for nine consecutive weeks.
On an unadjusted basis, total volume decreased 2% compared with the previous week.
Applications for purchases decreased 2% on an unadjusted basis compared with the previous week but were up 15% compared with the same week one year earlier.
Applications for refinances were up 74% compared with the same week one year ago.
“Mortgage applications fell last week despite mortgage rates hitting another record low in MBA’s survey,” says Joel Kan, associative vice president of economic and industry forecasting for the MBA, in a statement. “Investors are contemplating the risks of the recent resurgence of COVID-19 cases to the labor market and economy, and Treasury rates and mortgage rates are moving lower as a result.
“After two months of strong growth, purchase applications declined for the second week in a row,” Kan says. “The weakening in activity is potentially a signal that pent-up demand is starting to wane and that low housing supply is limiting prospective buyers’ options. The average purchase application loan size increased to a record high in our survey – more proof that tight inventory conditions are leading to faster price growth.
“Refinance applications also decreased but remained 74 percent higher than a year ago,” Kan adds. “The 30-year fixed rate has been below the 3.5 percent mark since late March. It is possible that many borrowers have already refinanced or are waiting for rates to go even lower.”
The refinance share of mortgage activity decreased to 61.2% of total applications, down from 61.3% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 3.2% of total applications.