Mortgage Applications Bounce Back in MBA Weekly Survey

Mortgage applications increased from one week earlier as key interest rates held steady, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending June 5. 

The previous week’s results included an adjustment for the Memorial Day holiday.

The Market Composite Index increased by 9.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 20 percent compared to the previous week. 

The unadjusted Refinance Index increased by 11 percent from the previous week and was 80 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 61.3 percent of total applications from 59.5 percent the previous week.

The seasonally adjusted Purchase Index increased by 5 percent from one week earlier. The unadjusted Purchase Index increased by 15 percent compared to the previous week and was 13 percent higher than the same week one year ago.

“Fueled again by low mortgage rates, pent-up demand from earlier this spring and states reopening across the country, purchase mortgage applications and refinances both increased,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The recovery in the purchase market continues to gain steam, with the seasonally adjusted index rising to its highest level since January. Purchase activity increased for the eighth straight week and was a notable 13 percent higher than a year ago. Refinances moved higher for the first time in nearly two months, with both conventional and government applications rising and the overall index coming in 80 percent above year-ago levels.”

MBA said the FHA share of total applications increased to 11.5 percent from 11.2 percent the week prior. The VA share of total applications increased to 12.3 percent from 12.0 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

MBA reported he average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.38 percent from 3.37 percent, with points unchanged at 0.30 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.70 percent from 3.66 percent, with points decreasing to 0.26 from 0.30 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA decreased to 3.38 percent from 3.46 percent, with points increasing to 0.24 from 0.23 (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 2.83 percent from 2.85 percent, with points decreasing to 0.26 from 0.27 (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 3.02 percent from 3.05 percent, with points increasing to 0.27 from 0.25 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 3.1 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.