Mortgage applications increased again this week, mostly still thanks to refinances but conventional and VA applications contributed too, following a rate decrease to its lowest level since April.
According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending June 27, the Market Composite Index (a measure of mortgage loan application volume) increased 2.7% from the previous week’s 1.1% increase. On an unadjusted basis, the Index increased 13% compared with the previous week.
“Mortgage rates were lower across all loan types last week, with the 30-year fixed rate declining to its lowest level since April at 6.79 percent. This decline prompted an increase in refinance applications, driven by a 10 percent increase in conventional applications and a 22 percent increase in VA refinance applications,” said Joel Kan, MBA’s vice president and deputy chief economist. “As borrowers with larger loans tend to be more sensitive to rate changes, the average loan size for a refinance application increased to $313,700 after averaging less than $300,000 for the past six weeks.”
MBA also reported that the Refinance Index increased 7% from the previous week and was 40% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0.1% from one week earlier. The unadjusted Purchase Index increased 10% compared with the previous week and was 16% higher than the same week one year ago.
The refinance share of mortgage activity increased to 40.1% of total applications from 38.4% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.8% of total applications.
“Purchase activity was essentially flat over the week, as overall uncertainty continues to hold homebuyers out of the market,” Kan added, noting that purchase activity still remains at 16% higher than last year’s pace.
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