After increasing for nine consecutive weeks, purchase applications fell 3% on an adjusted basis during the week ended June 19, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
However, on an unadjusted basis, purchase applications were up 18% compared with a year ago.
Applications for refinances decreased 12% compared with the previous week – however, they were 76% higher compared with a year ago.
As a result, total volume decreased 8.7% on a seasonally adjusted basis compared with one week earlier.
On an unadjusted basis, total volume decreased 9% compared with the previous week.
“Mortgage applications decreased nine percent last week, with both refinance and purchase activity falling despite the 30-year fixed rate mortgage staying at 3.30 percent – the record low in MBA’s survey,” says Joel Kan, associate vice president of economic and industry forecasting, in a statement. “Refinance applications dropped to their lowest level in three weeks, but the index remained 76 percent higher than a year ago. Despite the decline last week, MBA still anticipates refinance originations to increase to $1.35 trillion in 2020 – the highest level since 2012.
“Even with high unemployment and economic uncertainty, the purchase market is strong,” Kan says. “Activity has climbed above year-ago levels for five straight weeks and was 18 percent higher than a year ago last week. One factor that may potentially crimp growth in the months ahead is that the release of pent-up demand from earlier this spring is clashing with the tight supply of new and existing homes on the market. Additional housing inventory is needed to give buyers more options and to keep home prices from rising too fast.”
The refinance share of mortgage activity decreased to 61.3% of total applications, down from 63.2% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 3.1% of total applications.
The average rate for a 30-year, fixed-rate mortgage remained unchanged at 3.30%.