While the state of the economy may still be experiencing some uncertainty, it appears that increasing inventory in some areas is having an overall positive impact on loan application volume, which economists report this week was 20% ahead of last year at this time.
According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending June 6, the Market Composite Index (a measure of mortgage loan application volume) increased 12.5% from the previous week’s 3.9% decrease. On an unadjusted basis, the Index increased 23% compared with the previous week. Last week’s results included an adjustment for the Memorial Day holiday.
“Coming out of the Memorial Day holiday, mortgage applications increased to the highest level in over a month, driven by growth in both purchase and refinance applications. Treasury rates saw some movement during the week, which resulted in additional opportunities for borrowers,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The rate for 15-year fixed rate loans and FHA loans saw declines last week, while the 30-year fixed rate was largely unchanged. Purchase applications were 20 percent ahead of last year’s pace, continuing to show strength compared to a year ago. Despite ongoing uncertainty surrounding the economy, homebuyers seem to be taking advantage of loosening housing inventory in certain markets.”
MBA reported that the Refinance Index increased 16% from the previous week and was 28% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 10% from one week earlier. The unadjusted Purchase Index increased 20% compared with the previous week and was 20% higher than the same week one year ago.
The refinance share of mortgage activity increased to 36.7% of total applications from 35.2% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.2% of total applications.
For this week’s full report, click here.
