WASHINGTON — Mortgage application activity rebounded sharply during the first week of June, with both purchase and refinance demand increasing following the Memorial Day holiday period, according to the Mortgage Bankers Association.
The MBA reported that its Market Composite Index, a measure of mortgage loan application volume, increased 10.8% on a seasonally adjusted basis for the week ended June 5. On an unadjusted basis, total application volume rose 21% from the previous week.
Refinancing activity led the increase, while home purchase applications also posted gains despite continued volatility in mortgage rates.
“Mortgage rates were volatile last week as news from the Middle East continues to drive markets,” Mike Fratantoni, MBA’s senior vice president and chief economist, said in a statement. “While the average rate was up slightly, with the 30-year fixed rate now at 6.60%, there were opportunities where borrowers were seeing somewhat lower rates. Both refinance and purchase applications rebounded coming out of the Memorial Day holiday week, with refinance applications up 15% and purchase applications up 7%.”
Application Activity
According to the MBA:
- The Refinance Index increased 15% from the previous week.
- Refinance activity was 20% higher than the same week a year ago.
- The seasonally adjusted Purchase Index rose 7%.
- The unadjusted Purchase Index increased 17% from the prior week.
- Purchase applications were 4% higher than a year earlier.
The refinance share of total mortgage activity increased to 40.2% from 38.0% the previous week.
The adjustable-rate mortgage (ARM) share of applications rose to 8.6% from the prior week, the MBA data show.
Government Loan Activity
The share of applications backed by government loan programs was mixed:
- FHA loans accounted for 17.4% of total applications, up from 17.0%.
- VA loans represented 13.4% of applications, down from 14.4%.
- USDA loans fell to 0.4% from 0.5%.
Mortgage Rates
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $832,750 or less increased to 6.60% from 6.57%. Points decreased to 0.63 from 0.67 for borrowers with 80% loan-to-value ratios.
Other mortgage rates were:
- 30-year fixed-rate jumbo loans (greater than $832,750): 6.66%, unchanged from the prior week. Points increased to 0.54 from 0.35.
- 30-year FHA-backed loans: 6.27%, up from 6.26%. Points increased to 0.78 from 0.75.
- 15-year fixed-rate mortgages: 5.99%, up from 5.93%. Points decreased to 0.68 from 0.76.
- 5/1 adjustable-rate mortgages: 5.96%, up from 5.82%. Points decreased to 0.75 from 0.88.
The MBA said effective rates increased across all loan categories compared with the previous week.
The weekly survey covers mortgage bankers, commercial banks and thrifts and is considered a leading indicator of housing market and refinancing activity.
