Mortgage applications dipped for the second week in a row, this time by 1.8%, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.
The details:
– Unadjusted Market Composite Index down 2%
– Refinance Index decreased 2% WoW, 8% YoY
– Seasonally adjusted Purchase Index decreased 1% WoW
– Unadjusted Purchase Index decreased 1% WoW, 14% YoY
– Refinance share of mortgage activity decreased to 61.6% of total applications from 61.9% the previous week
What it means:
For mortgage applications, this is the lowest level since the beginning of 2020. The biggest culprit is rising home prices—being driven by a continuing inventory shortage—which is also increasing average loan amounts.
“Even as mortgage rates declined, with the 30-year fixed rate dropping 5 basis points to 3.15%, both purchase and refinance applications decreased,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Treasury yields have been volatile despite mostly positive economic news, including last week’s June jobs report, which showed ongoing improvements in the labor market. However, rates continued to move lower—especially late in the week. The 30-year fixed rate was 11 basis points lower than the same week a year ago, but many borrowers previously refinanced at even lower rates. Refinance applications have trended lower than 2020 levels for the past four months.”
