After four weeks of declines, mortgage applications increased 7.2% from last week’s dip of 1.4%, according to the latest Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) Weekly for the week ending June 9, 2023.
- The Market Composite Index, a measure of mortgage loan application volume, increased 7.2% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 18% compared with the previous week.
- The Refinance Index increased 6% from the previous week and was 41% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 8% from one week earlier.
- The unadjusted Purchase Index increased 17% compared with the previous week and was 27% lower than the same week one year ago.
- The refinance share of mortgage activity remained unchanged at 27.3% of total applications from the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 6.5% of total applications.
- The FHA share of total applications decreased to 13.0% from 13.2% the week prior.
- The VA share of total applications increased to 12.6% from 12.5% the week prior.
- The USDA share of total applications increased to 0.5% from 0.4% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.77% from 6.81%, with points decreasing to 0.65 from 0.66 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 6.79% from 6.74%, with points decreasing to 0.5 from 0.56 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.70% from 6.73%, with points decreasing to 1.14 from 1.15 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 6.25%, with points increasing to 1.05 from 0.62 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs decreased to 5.90% from 5.93%, with points increasing to 1.17 from 0.96 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Mortgage rates declined for the second straight week, with the 30-year fixed rate decreasing to 6.77%. Mortgage applications were up over the week, but remained well below levels from a year ago,” said Joel Kan, MBA’s vice president and deputy chief economist. “Rates that are still more than a percentage point higher than a year ago, and low for-sale inventory continue to constrain homebuying activity in many markets. The average loan size on a purchase loan decreased for the third straight week, as we continue to see more first-time homebuyer activity in the purchase market.
Added Kan, “Refinance applications accounted for less than a third of all applications and remained more than 40% behind last year’s pace. Elevated rates have reduced the benefit of a rate/term refinance for many borrowers and continue to discourage cash-out refinances as borrowers are unwilling to give up their lower rates.”
