The Market Composite Index, a measure of mortgage loan application volume, increased 6.6% on a seasonally adjusted basis from one ago, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 10.
Last week’s results are compared to the prior week, which included an adjustment for the Memorial Day holiday.
On an unadjusted basis, the index increased 17% compared with the previous week. The Refinance Index increased 4% from the previous week and was 76% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 8% from one week earlier. The unadjusted Purchase Index increased 18% compared with the previous week and was 16% lower than the same week one year ago.
“Mortgage rates increased for all loan types, with the 30-year fixed rate last week jumping 25 basis points to 5.65 percent – the highest level since 2008,” mentions Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Mortgage rates followed Treasury yields up in response to higher-than-expected inflation and anticipation that the Federal Reserve will need to raise rates at a faster pace. Despite the increase in rates, application activity rebounded following the Memorial Day holiday week but remained 0.29 percent below pre-holiday levels. With mortgage rates well above 5 percent, refinance activity continues to run more than 70 percent lower than last year.”
“Purchase applications were down more than 15 percent compared to last year, as ongoing inventory shortages and affordability challenges have cooled demand, coinciding with the rapid jump in mortgage rates,” adds Kan.
The refinance share of mortgage activity decreased to 31.7% of total applications from 32.2% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.1% of total applications.
The FHA share of total applications increased to 11.8% from 11.3% the week prior. The VA share of total applications increased to 11.7% from 11.4% the week prior. The USDA share of total applications increased to 0.6% from 0.5% the week prior.
Image: “Guptill House in Sarasota Florida” by trishhartmann is licensed under CC BY 2.0