Lower mortgage rates spurred the increase
Mortgage application activity rebounded after another weekly increase in mortgage rates, the Mortgage Bankers Association reported today.
MBA’s market composite index – a measure of loan application volume – jumped 7.2% on a seasonally adjusted basis and 18% on an unadjusted basis for the week ending June 09.
“Mortgage rates declined for the second straight week, with the 30-year fixed rate decreasing to 6.77%. Mortgage applications were up over the week but remained well below levels from a year ago,” MBA deputy chief economist Joel Kan said. “Rates that are still more than a percentage point higher than a year ago, and low for-sale inventory continue to constrain homebuying activity in many markets.”
Read next: Mortgage application increase after falling for four weeks
The increase in the overall application volume was driven by a 17% week-over-week gain in purchase applications. Refinance activity also increased 6% from the week earlier, and the share of refi activity held steady at 27.3% of total applications.
“The average loan size on a purchase loan decreased for the third straight week, as we continue to see more first-time homebuyer activity in the purchase market,” Kan said. “Refinance applications accounted for less than a third of all applications and remained more than 40% behind last year’s pace. Elevated rates have reduced the benefit of a rate/term refinance for many borrowers and continue to discourage cash-out refinances as borrowers are unwilling to give up their lower rates.”
Want to keep up with the latest mortgage news? Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
