The latest update from the Mortgage Bankers Association (MBA) reveals a mixed bag for mortgage applications. While higher interest rates have dampened overall application volume, there's a silver lining with refinancing activity showing a significant improvement compared to last year.
Weekly Highlights
- Composite Index: Decreased by 2.6% on a seasonally adjusted basis but increased by 8.0% on an unadjusted basis from the previous week.
- Refinance Index: Dropped by 2.0% compared to the previous week but is up 29.0% from the same week in 2023.
- Refinance Share: Increased to 35.7% of total applications from 35.1% the week before.
Despite the uptick in refinancing, the Purchase Index saw a decline:
- Seasonally Adjusted Purchase Index: Fell by 3.0% from the previous week.
- Unadjusted Purchase Index: Increased by 7.0% from the previous week but is still down 12.0% compared to the same week last year.
Mike Fratantoni, MBA’s SVP and Chief Economist, commented, "Mortgage rates moved higher last week, crossing the 7 percent mark, even as the latest inflation data has kept market expectations alive for a rate cut from the Fed later this year. Purchase applications decreased the final full week of June, even as both new and existing inventories have increased over the past few months. Refinance activity also remains subdued – although there was a slight increase in applications for conventional refinance loans.”
Key Takeaways from MBA’s Weekly Mortgage Application Survey
- Loan Sizes: The average loan size rose to $374,900 from $372,300, and purchase loans increased to $434,200 from $420,300.
- FHA Share: Remained steady at 13.1%.
- VA Share: Dropped to 12.9% from 13.8%.
- USDA Share: Hit a recent low of 0.3%.
Interest Rates Overview
- 30-year Fixed-Rate Mortgages (FRM): Increased to 7.03% from 6.93% with points rising slightly to 0.62 from 0.61.
- Jumbo 30-year FRM: Average rate climbed to 7.11% from 7.04%, with points decreasing to 0.5 from 0.60.
- 30-year FHA-backed FRM: Rose to 6.90% from 6.82%, with points dropping to 0.95 from 0.99.
- 15-year Fixed-Rate Mortgages: Went up to 6.56% from 6.46%, with points falling to 0.54 from 0.75.
- Adjustable-Rate Mortgages (ARM): The 5/1 year adjustable rate increased to 6.38% from 6.29%, with points rising to 0.54 from 0.50. ARM share remained steady at 6.0%.
This shift in the mortgage landscape highlights the evolving dynamics of the housing market, with refinancing taking a more prominent role despite the rise in interest rates. Stay tuned for more updates on how these trends could impact your mortgage plans.