The MBA's Market Composite Index, which measures weekly application volumes based on surveys of the trade group's members, rose a seasonally adjusted 0.9% for the seven-day period ending July 7. A week earlier, the index had fallen 4.4%, while compared with the same week in 2022, volume was 30.5% lower. The week's data included an adjustment for the July 4th holiday.
Application activity rose despite a 22 basis-point leap in the average rates for the conforming (balances under $726,000) 30-year fixed mortgage to 7.07% among MBA lenders. One week earlier, the 30-year FRM averaged at 6.85%. Points increased to 0.74 from 0.65 for 80% loan-to-value ratio loans.
The weekly average rate hit its highest mark since last November, as investors tried to gauge the current health of spending and production and its impact on potential policy moves.
"Incoming economic data continue to send mixed signals about the economy, with the overall impact leaving Treasury yields higher last week, as markets expect that the Federal Reserve will need to hold rates higher for longer to slow inflation. All mortgage rates in our survey followed suit," said Joel Kan, MBA vice president and deputy chief economist, in a press release.
But
With the MBA reporting a reduction in
The rise in purchase volume was offset by a drop in refinances last week, according to the survey. The seasonally adjusted Purchase Index climbed higher by 1.8%, but still landed 26.3% under its level from a year ago. Federally backed home buying activity provided an upward push, with a more-than-7% rise in government-guaranteed applications from the previous survey.
But average purchase amounts recorded on applications still clocked in higher despite the increased volume of government loans, which are commonly used for entry-level properties. Mean purchase sizes edged up 0.6% to $426,100 from $423,500. The upward movement comes as other data released last week also showed
Meanwhile, the average refinance size slipped 2.2% to $254,900 from $260,700. The overall average across all new applications came in at $380,200, up 0.4% from $378,800 one week prior.
The Refinance Index, likewise, dropped 4.1% from the previous week and 26.6% on a year-over-year basis as well to come in at its lowest since early June, Kan said. "Demand for rate/term and cash-out refinances remains extremely low with mortgage rates over 7%."
At the same time, the refinance share of mortgage activity slid down to a 26.8% share relative to all applications, falling from 27.4% a week earlier.
Government-guaranteed loan applications jumped up at a more rapid pace than conventional mortgages, with refinances increasing alongside purchases, leading them to grab a larger share of overall activity. Applications backed by the Federal Housing Administration garnered 13.3% of volume compared to 13% in the previous survey, while Department of Veterans Affairs-guaranteed loans accounted for a 12.6% share, up from 11.7%. The small slice of activity coming from U.S. Department of Agriculture programs remained at 0.4% week over week.
Like other 30-year rates, the contract fixed average for a FHA-sponsored mortgage headed up steeply and finished 18 basis points higher at 6.86% compared to 6.68% one week prior. Points increased to 1.23 from 0.98 for 80% LTV loans.
The 15-year contract rate accelerated 12 basis points to an average of 6.42% from 6.3% seven days earlier. Points for the 15-year mortgage also surged to 1.22 from 0.91.
The 5/1 adjustable-rate mortgage, which starts fixed before becoming variable after 60 months, leaped to 6.24% from 6%. Points increased to 1.42 from 1.23. Adjustable-rate loans, whose popularity tends to rise and fall in tandem with the direction of interest rates, also increased to a 6.6% share of total volume compared to 6.2% one week earlier.
