Total mortgage application volume increased 2.7% on an adjusted basis during the week ended June 27, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Most of the increase was due to a boost in applications for refinances, which jumped 7% compared with the previous week due to slightly lower mortgage rates.
Compared with the same week one year ago, applications for refinances were up 40%.
Applications for purchases increased a mere 0.1% compared with the previous week and were up 16% compared with the same week one year ago.
The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balance was 6.79% last week – down from 6.88% the previous week.
“Mortgage rates were lower across all loan types last week, with the 30-year fixed rate declining to its lowest level since April at 6.79 percent,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “This decline prompted an increase in refinance applications, driven by a 10 percent increase in conventional applications and a 22 percent increase in VA refinance applications.”
“As borrowers with larger loans tend to be more sensitive to rate changes, the average loan size for a refinance application increased to $313,700 after averaging less than $300,000 for the past six weeks,” Kan says. “Purchase activity was essentially flat over the week, as overall uncertainty continues to hold homebuyers out of the market. However, purchase activity still remains 16 percent higher than last year’s pace.”
The refinance share of mortgage activity increased to 40.1% of total applications, up from 38.4% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 7.8% of total applications.
Photo: Ben Mullins