Mortgage Applications Up Again as 30-Year Rates Hit Another Record Low in MBA Weekly Survey

Mortgage applications increased for the second straight week as the 30-year fixed rate fell to yet another record low, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending July 10.

The previous week’s results included an adjustment for the Fourth of July holiday.

The Market Composite Index increased by 5.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 16 percent compared to the previous week. 

The unadjusted Refinance Index increased by 12 percent from the previous week and was 107 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 64.2 percent of total applications from 60.1 percent the previous week.

The seasonally adjusted Purchase Index decreased by 6 percent from one week earlier. The unadjusted Purchase Index increased by 5 percent compared to the previous week and was 16 percent higher than the same week one year ago.

The FHA share of total applications increased to 11.1 percent from 10.9 percent the week prior. The VA share of total applications increased to 11.0 percent from 10.4 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

“Mortgage rates continued their downward trend, with the 30-year fixed rate falling 7 basis points to 3.19 percent – another record low in MBA’s survey and 63 basis points lower than the recent high in late March,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The drop in rates led to a jump in refinance activity to the highest level in a month, with refinance loan balances also climbing to a high last seen in March.

Kan noted purchase applications fell over the week, “but remained 15 percent higher than a year ago – the eighth consecutive week of year-over-year increases. Purchase activity remains relatively strong, despite the continued economic uncertainty and high unemployment caused by the ongoing pandemic.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.19 percent from 3.26 percent, with points decreasing to 0.33 from 0.35 (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 $510,400) increased to 3.53 percent from 3.52 percent, with points decreasing to 0.29 from 0.36 (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 3.24 percent from 3.31 percent, with points increasing to 0.29 from 0.24 (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 2.70 percent from 2.77 percent, with points decreasing to 0.32 from 0.32 (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 3.00 percent from 2.98 percent, with points decreasing to 0.02 from 0.10 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 3.0 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.