Mortgage application volume spiked 16.0% on an adjusted basis during the week ended July 9, as the average rate for a 30-year fixed rate mortgage dropped to 3.09%, down from 3.15% the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances increased a whopping 20% compared with the previous week while applications for purchases increased 8%.
Year over year, applications for refinances were down 29% while applications for purchases were also down 29%.
On an unadjusted basis, total volume decreased 7% compared with the previous week.
“Overall applications climbed last week, driven heavily by increased refinancing as rates dipped again,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Treasury yields have trended lower over the past month as investors remained concerned about the COVID-19 variant and slowing economic growth.
“Mortgage rates fell for the second consecutive week as a result, with the 30-year fixed rate hitting 3.09 percent, its lowest level since February 2021,” Kan says. “Refinance applications increased over 20 percent last week after adjusting for the July 4th holiday, aided by a 23 percent increase in conventional refinance applications. Also, there may have been a delayed spillover of applications from the previous week, when rates also decreased, but there was not much of response in terms of refinance applications.
“Purchase applications increased last week, but average loan sizes decreased to their lowest level since January 2021,” Kan adds. “We continue to see ebbs and flows as housing demand remains strong but for-sale inventory remains low. However, lower rates may be helping some home buyers close on their purchases, especially first-time home buyers. The year-over-year comparisons were down significantly for both purchase and refinance applications, as they were relative to a non-holiday week in 2020.”
The refinance share of mortgage activity increased to 64.1% of total applications, up from 61.6% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 3.5% of total applications.
Photo: Bruce Mars