Mortgage Applications Increase in MBA Weekly Survey

Mortgage applications increased for the first time in three weeks as key mortgage rates fell to yet another record low, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending July 3. 

This week’s results include an adjustment for the Independence Day holiday.

The Market Composite Index increased by 2.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 8 percent compared to the previous week. 

The unadjusted Refinance Index increased by 0.4 percent from the previous week and was 111 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 60.1 percent of total applications from 61.2 percent the previous week.

The seasonally adjusted Purchase Index increased by 5 percent from one week earlier. The unadjusted Purchase Index decreased by 5 percent compared to the previous week and was 33 percent higher than the same week one year ago.

The FHA share of total applications decreased to 10.9 percent from 11.7 percent the week prior. The VA share of total applications decreased to 10.4 percent from 10.8 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.6 percent the week prior.

“Mortgage rates declined to another record low as renewed fears of a coronavirus resurgence offset the impacts from a week of mostly positive economic data, such as June factory orders and payroll employment,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Borrowers acted in response to these lower rates, after accounting for the July 4th holiday. Purchase applications continued their recovery, increasing 5 percent to the highest level in almost a month and 33 percent from a year ago. The average purchase loan size increased to $365,700 – also another high – as borrowers contend with limited supply and higher home prices.” 

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.26 percent from 3.29 percent, with points decreasing to 0.35 from 0.36 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week. The 30-year fixed rate has fallen by 53 basis points since late March.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) decreased to 3.52 percent from 3.59 percent, with points increasing to 0.36 from 0.31 (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 decreased to 3.31 percent from 3.43 percent, with points decreasing to 0.24 from 0.36 (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 2.77 percent from 2.81 percent, with points decreasing to 0.32 from 0.40 (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 decreased to 2.98 percent from 3.04 percent, with points increasing to 0.10 from -0.03 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity increased to 3.4 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.