Mortgage Loan Application Volume Continues Slow Increase

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Mortgage Bankers Association’s (MBA) latest Weekly Mortgage Applications Survey shows mortgage applications increased 0.7% on a seasonally adjusted basis from one week earlier, according to data for the week ending June 24.

On an unadjusted basis, the Market Composite Index decreased 20% compared with the previous week. This week’s results include an adjustment for the observance of the Juneteenth holiday.

The Refinance Index increased 2% from the previous week and was 80% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 0.1% from one week earlier. The unadjusted Purchase Index decreased 21% compared with the previous week and was 24% lower than the same week one year ago.

“Mortgage rates continue to experience large swings. After increasing 65 basis points during the past three weeks, the 30-year fixed rate declined 14 basis points last week to 5.84 percent. Rates are still significantly higher than they were a year ago, when the 30-year fixed rate was at 3.2 percent,” comments Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The decline in mortgage rates led to a slight increase in refinancing, driven by an uptick in conventional loans. However, refinances are still 80 percent lower than a year ago and over 60 percent below the historical average.”

“Overall purchase activity has weakened in recent months due to the quick jump in mortgage rates, high home prices and growing economic uncertainty,” adds Kan. “Purchase applications were essentially flat last week but were supported by a 6 percent increase in government loan applications. The average purchase loan amount declined to $413,500, which highlights an ongoing downward trend seen since it hit a record $460,000 in March 2022.”

The refinance share of mortgage activity increased to 30.3% of total applications from 29.7% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 10.1% of total applications.

The FHA share of total applications remained unchanged at 12% from the week prior. The VA share of total applications increased to 11.2% from 10.7% the week prior. The USDA share of total applications increased to 0.6% from 0.5% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.84% from 5.98%, with points decreasing to 0.64 from 0.77 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) decreased to 5.42% from 5.49%, with points decreasing to 0.28 from 0.45 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained at 5.62%, with points decreasing to 1.15 from 1.18 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 5.06% from 5.05%, with points decreasing to 0.72 from 0.86 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week. The average contract interest rate for 5/1 ARMs decreased to 4.64% from 4.78%, with points decreasing to 0.72 from 0.84 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

Image: “Guptill House in Sarasota Florida” by trishhartmann is licensed under CC BY 2.0

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