Refi business is picking up on falling mortgage rates
Mortgage
applications
shot
up
15.6%
from
one
week
earlier, according
to
data
from
the
Mortgage
Bankers
Association’s
(MBA)
weekly
application
survey
for
the
week
ending
June
7.
On
an
unadjusted
basis,
the
market
composite
index
increased
26%
compared
with
the
previous
week.
The
refinance
index
increased
28%
from
the
previous
week
and
was
also
28%
higher
than
the
same
week
one
year
ago.
The
seasonally
adjusted
purchase
index
increased
9%
from
one
week
earlier.
The
unadjusted
purchase
index
increased
19%
compared
with
the
previous
week
but
was
still
12%
lower
than
the
same
week
one
year
ago.
“Mortgage
rates
were
trending
lower
over
the
course
of
last
week
until
a
stronger
than
anticipated
employment
report
resulted
in
a
bounce
back,
with
the
weekly
average
for
the
30-year
fixed
mortgage
rate
decreasing
to
7.02%,”
said
Mike
Fratantoni,
MBA’s
SVP
and
chief
economist
in
a
statement.
“Lower
rates
earlier
in
the
week
meant
a
strong
increase
in
refinance
activity,
particularly
for
VA
borrowers,
who
jumped
on
the
chance
to
lower
their
rates. Overall
refinance
activity
was
more
than
27%
above
one
year
ago.”
He
added:
“On
a
seasonally
adjusted
basis
and
compared
to
the
holiday-adjusted
level
from
the
prior
week,
purchase
activity
also
increased.
Multiple
data
sources
are
now
indicating
that
home
inventory
levels,
while
still
historically
low,
are
up
significantly
from
last
year
at
this
time.
This
is
good
news
for
many
prospective
homebuyers
who
have
been
frustrated
by
the
lack
of
homes
on
the
market.”
The
refinance
share
of
mortgage
activity
increased
to
35.2%
of
total
applications
from
31.1%
the
previous
week.
The
adjustable-rate
mortgage
(ARM)
share
of
activity
decreased
to
6.3%
of
total
applications.
The
FHA
share
of
total
applications
decreased
to
13.1%
from
13.2%
the
week
prior
but
the
share
of
VA
applications
rose
to
14.7%
from
12.1%
from
the
prior
week.
The
average
contract
interest
rate
for
30-year
fixed-rate
mortgages
with
conforming
loan
balances
($766,550
or
less)
decreased
to
7.02%
from
7.07%,
with
points
unchanged
at
0.65
(including
the
origination
fee)
for
80%
loan-to-value
ratio
(LTV)
loans.
The
average
contract
interest
rate
for
5/1
ARMs
increased
to
6.45%
from
6.37%
with
points
increasing
to
0.81
from
0.63
(including
the
origination
fee)
for
80%
LTV
loans.
The
effective
rate
increased
from
last
week.
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