Even as interest rates remained at record-low levels, mortgage application activity for both purchases and refinancings declined compared to one week earlier, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending June 19 found that total activity decreased by 8.7%
"Mortgage applications decreased last week, with both refinance and purchase activity falling despite the 30-year fixed-rate mortgage staying at 3.3% — the record low in MBA's survey," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "Refinance applications dropped to their lowest level in three weeks, but the index remained 76% higher than a year ago. Despite the decline last week, MBA still anticipates refinance originations to increase to $1.35 trillion in 2020 — the highest level since 2012."
There was a 12% decline in the refinance index last week. The refinance share of mortgage activity decreased to 61.3% of total applications from 63.2% the previous week.
"Even with high unemployment and economic uncertainty, the purchase market is strong. Activity has climbed above year-ago levels for five straight weeks and was 18% higher than a year ago last week. One factor that may potentially crimp growth in the months ahead is that the release of pent-up demand from earlier this spring is clashing with the tight supply of new and existing homes on the market. Additional housing inventory is needed to give buyers more options and to keep home prices from rising too fast," Kan said.
Compared with last week, purchase application volume was down 3% on a seasonally adjusted basis and 4% unadjusted.
Adjustable-rate mortgage activity increased to 3.1% of total applications from 2.8%, while the share of Federal Housing Administration-insured loan applications increased to 11.4% from 11% the week prior.
The share of applications for Veterans Affairs-guaranteed loans decreased to 11% from 11.5% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.7% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) remained unchanged at 3.3%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400), the average contract rate decreased 5 basis points to 3.62%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 2 basis points to 3.35%. For 15-year fixed-rate mortgages, the average increased 1 basis point to 2.81%. The average contract interest rate for 5/1 ARMs increased 2 basis points to 3.09%.
