Mortgage Refinance Applications Make a Strong Jump

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The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 10 shows that refinance applications increased 12 percent from the previous week and was 107 percent higher than the same week one year ago.

Purchase mortgage applications increased 5.1 percent from one week earlier.

“Mortgage rates continued their downward trend, with the 30-year fixed rate falling 7 basis points to 3.19 percent – another record low in MBA’s survey and 63 basis points lower than the recent high in late March,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The drop in rates led to a jump in refinance activity to the highest level in a month, with refinance loan balances also climbing to a high last seen in March.

“Purchase applications fell over the week but remained 15 percent higher than a year ago – the eighth consecutive week of year-over-year increases,” he adds. “Purchase activity remains relatively strong, despite the continued economic uncertainty and high unemployment caused by the ongoing pandemic.”

The refinance share of mortgage activity increased to 64.2 percent of total applications, from 60.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3.0 percent of total applications.

The FHA share of total applications increased to 11.1 percent from 10.9 percent the week prior. The VA share of total applications increased to 11.0 percent from 10.4 percent, and the USDA share of total applications decreased to 0.6 percent from 0.7 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.19 percent from 3.26 percent, with points decreasing to 0.33 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Photo: Joel Kan

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