Refinance demand drives uptick in mortgage applications

Refinance demand drives uptick in mortgage applications

Mortgage applications continued to rise (albeit slightly) in the last week, with refinance applications driving the increase again, according to the latest data from the Mortgage Bankers Association.

According to the data from the MBA’s Weekly Mortgage Applications Survey for the week ending June 16, mortgage applications increased 0.6% from one week earlier.

Last week’s report showed that mortgage applications increased 2.8% from the week earlier, which included an adjustment for the Memorial Day holiday. That followed the previous week’s increase of 7.1% from the week before that.

As with last week’s report, the increase came from refinances.

Overall, the Market Composite Index, a measure of mortgage loan application volume, increased 0.6% on a seasonally adjusted basis from one week ago.

The Refinance Index rose 2% from the previous week to its highest level since November 2016, while the seasonally adjusted Purchase Index decreased 1% from one week earlier.

Additionally, the MBA report showed that the refinance share of mortgage activity increased from 45.4% of total applications last week to 46.6% this week. The adjustable-rate mortgage share of activity increased to 7.5% of total applications from 7.4% last week.

The report also showed that the Federal Housing Administration’s share of total applications fell to 10.1% from 11.2% last week, while the Veterans Affairs’ share of total applications fell from 11.1% to 10.4%.

The Department of Agriculture’s share of total applications fell slightly, from 0.8% to 0.7%.

Finally, the report showed that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained at 4.13%, while the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased from 4.06% to 4.08%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased from 4% to 4.04%.

The average contract interest rate for 15-year fixed-rate mortgages increased from 3.37% to 3.4%, and the average contract interest rate for 5/1 ARMs remained at 3.26%.

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