MBA Reports Rising Weekly Mortgage Applications

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MBA Reports Rising Weekly Mortgage Applications

Jun 30, 2023 | News | 0 comments

According to the most recent information from the Mortgage Bankers Association, there was a further increase of 0.5% in mortgage applications last week.

For over three decades, starting from 1990, the MBA has been conducting a weekly survey on mortgage applications. This survey encompasses a significant portion, more than 75%, of residential mortgage applications in the United States. The data is gathered from various sources such as mortgage bankers, commercial banks, and thrifts.

In the week ending June 16, the mortgage applications survey unveiled that the market composite index, indicating mortgage loan application volume, rose by 0.5% after accounting for seasonal adjustments. However, the raw data showed a 1% decline compared to the previous week.

The previous week had witnessed a notable 7.2% surge in the market composite index on a seasonally adjusted basis, primarily influenced by reduced mortgage rates.

During the week ending June 16, the survey’s refinance index experienced a 2% drop compared to the prior week, while the seasonally adjusted purchase index increased by the same percentage. On an unadjusted basis, the purchase index decreased by 10 basis points.

For the week ending June 16, the MBA observed the following trends in mortgage applications:

Refinance applications decreased to 26.9%.
Adjustable-rate mortgage applications dropped to 6.3%.
FHA applications increased to 13.3%.
VA applications decreased to 11.9%.
USDA applications slipped to 0.4%.

MBA’s Joel Kan noted that the increase in FHA purchase loans indicates the involvement of first-time homebuyers, but low inventory levels continue to constrain activity. Refinance applications declined, with their share of applications remaining below 27%.

Average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.73%. However, for jumbo loans, it increased to 6.8%. Points for 30-year fixed-rate loans with an 80% loan-to-value ratio decreased to 0.64. There was a decrease in the effective rate compared to the previous week.

The average contract interest rate for FHA-backed 30-year fixed-rate mortgages increased to 6.74%. 15-year fixed-rate mortgages saw a slight increase to 6.26%, with points for 80% loan-to-value ratio loans dropping to 0.71. The effective rate decreased compared to the previous week.

Kan noted that the 30-year fixed mortgage rate dropped to 6.73%, marking the third consecutive weekly decline. Conventional purchase applications saw a 2% increase, while FHA purchase activity rose by 3%. Additionally, Kan highlighted that jumbo rates surpassed conforming rates, a situation last observed in December 2021, due to tighter liquidity conditions prompting jumbo lenders to raise rates.