Mortgage applications decreased 8.7% on a seasonally adjusted basis from one week earlier, according to the Mortgage Bankers Association’s (MBA’s) Market Composite Index for the week ending June 19. On an unadjusted basis, the index decreased 9% compared with the previous week.
The Refinance Index decreased 12% from the previous week but was 76% higher than the same week a year ago. The seasonally adjusted Purchase Index was down 3% from one week earlier, while the unadjusted Purchase Index was down 4% compared with the previous week but 18% higher than the same week a year ago.
“Mortgage applications decreased 9% last week, with both refinance and purchase activity falling despite the 30-year fixed-rate mortgage staying at 3.3%—the record low in MBA’s survey,” said Joel Kan, associate vice president of economic and industry forecasting at the MBA. “Even with high unemployment and economic uncertainty, the purchase market is strong. Activity has climbed above year-ago levels for five straight weeks and was 18% higher than a year ago last week. One factor that may potentially crimp growth in the months ahead is that the release of pent-up demand from earlier this spring is clashing with the tight supply of new and existing homes on the market. Additional housing inventory is needed to give buyers more options and to keep home prices from rising too fast.”
The refinance share of mortgage activity decreased to 61.3% of total applications from 63.2% the prior week. The adjustable-rate mortgage (ARM) share of activity increased to 3.1% of total applications. In addition, the Federal Housing Administration (FHA) share of applications increased to 11.4% from 11% the week prior, the VA share decreased to 11% from 11.5%, and the USDA share remained unchanged from 0.7%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $510,400 or less, remained unchanged at 3.3%. Points increased to 0.32 from 0.29, including the origination fee, for 80% loan-to-value (LTV) ratio loans, and the effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances, greater than $510,400, decreased to 3.62% from 3.67%. Points increased to 0.29 from 0.28 for 80% LTV loans, and the effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.35% from 3.33%. Points decreased to 0.22 from 0.23 for 80% LTV loans, and the effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.09% from 3.07%. Points decreased to 0.01 from 0.29, and the effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 2.81% from 2.8%. Points increased to 0.30 from 0.28, including the origination fee, for 80% LTV loans, and the effective rate increased from last week.
