Mortgage application activity was on the rise last week, according to new data from the Mortgage Bankers Association (MBA).
The MBA’s Market Composite Index, a measure of mortgage loan application volume, was up 5.3% on a seasonally adjusted basis from one week earlier while the unadjusted index was up by an even 6%. The seasonally adjusted Purchase Index increased 8% from one week earlier and the unadjusted index saw a 9% upswing – although it was also 31% lower than the same week one year ago.
The Refinance Index inched up by a scant 0.1% from the previous week and was 57% lower than the same week one year ago. The refinance share of mortgage activity decreased to 27% of total applications from 28.6% in the previous week.
Among the federal program, the FHA share of total applications increased to 12.3% from 12%, the VA share of total applications increased to 12.8% from 11% and the USDA share of total applications decreased to 0.5% from 0.6% the week prior.
“Incoming data last week showed that the job market is beginning to slow, which led to the 30-year fixed rate decreasing to 6.30% – the lowest level in two months,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Prospective homebuyers this year have been quite sensitive to any drop in mortgage rates, and that played out last week with purchase applications increasing by 8%. Refinance application volume was a mixed bag with total volume essentially flat, conventional volume down for the week, but VA refinance volume increasing. The level of refinance activity remains almost 60% below last year, as most homeowners are currently locked in at much lower rates.”
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