MBA data shows rising Loan Activity Amid Post-FOMC Rate Adjustments
Mortgage applications rose for the second consecutive week as interest rates inched higher following the latest inflation data and Federal Reserve meeting.
The Mortgage Bankers Association (MBA) reported a 0.9% increase in its Market Composite Index, a measure of mortgage loan application volume, for the week ending June 14. On an unadjusted basis, the index dipped 0.1% compared to the prior week.
“Mortgage rates dropped last week following the latest inflation data and the FOMC meeting, with the 30-year conforming rate dropping to 6.94% and reaching its lowest level since the end of March,” said Mike Fratantoni, MBA’s senior vice president and chief economist.
The average interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less decreased to 6.94% from 7.02% the previous week.
Refinance applications slipped 0.4% but remained 30% higher than the same period last year. The seasonally adjusted purchase index, a gauge of homebuyer demand, increased 2% from the prior week, though it lagged 12% behind last year's levels.
"Purchase applications increased a small amount for the week, led by applications for conventional loans," Fratantoni noted. "Refinance application volume was also down slightly for the week but remains about 30% higher than this time last year."
While purchase applications remain lower than last year, the MBA forecasts a pick-up in home sales later in 2024 as more inventory becomes available.
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Other key figures showed the refinance share of mortgage activity holding steady at 35.2%, while the adjustable-rate mortgage (ARM) share decreased to 6.0% of total applications. The FHA share dipped to 12.7%, the VA share rose to 14.8%, and the USDA share was unchanged at 0.4%.
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