Rates Drop, Refi Apps Jump in MBA Weekly Survey

Mortgage applications, driven by the lowest rates in three years, increased by nearly 3 percent from one week earlier, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending June 17.

The Market Composite Index increased by 2.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 2 percent compared to the previous week.

The Refinance Index increased by 7 percent from the previous week. The refinance share of mortgage activity increased to 57.7 percent of total applications from 55.3 percent the previous week.

The seasonally adjusted Purchase Index decreased by 2 percent from one week earlier. The unadjusted Purchase Index decreased by 4 percent compared to the previous week and was 12 percent higher than the same week one year ago.

“Rates fell on concerns that Britain may vote to leave the European Union later this week. Although beliefs about the likelihood of an exit have since moderated, the ‘Brexit’ vote promises to bring continued volatility to markets this week,” said MBA Vice President of Research and Economics Lynn Fisher. “Notably, the jumbo rate fell to 3.70 percent last week, its lowest level since MBA started the series in 2011.”

The FHA share of total applications decreased to 11.7 percent from 11.8 percent the week prior. The VA share of total applications remained unchanged at 11.1 percent the week prior. The USDA share of total applications remained unchanged at 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since May 2013, 3.76 percent, from 3.79 percent, with points increasing to 0.33 from 0.32 (including origination fee) for 80 percent loan-to-value ratio 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 $417,000) decreased to its lowest level since January 2011, 3.70 percent, from 3.75 percent, with points increasing to 0.28 from 0.26 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA remained unchanged from 3.61 percent, with points decreasing to 0.24 from 0.27 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.04 percent from 3.06 percent, with points increasing to 0.36 from 0.34 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages increased to 2.92 percent from 2.87 percent, with points decreasing to 0.21 from 0.26 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 5.7 percent of total applications.

The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.