Meanwhile, purchase applications drop for second straight week
Refinance applications jumped for the week ending July 23, as the share of borrowers looking to secure a lower rate for the life of their loan increases due to another drop in interest rates.
The Mortgage Bankers Association’s Market Composite Index showed that mortgage applications grew 5.7% on a seasonally adjusted basis from the previous week. Unadjusted, mortgage apps rose 6% week over week.
The refinance index was 9% higher than the week before but was down 10% from a year ago. Meanwhile, the purchase index dipped 2% week over week and declined 18% year over year.
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“The 10-year Treasury yield fell last week, as investors grew concerned about increasing COVID-19 case counts and the downside risks to the current economic recovery,” said Joel Kan, AVP of economic and industry forecasting at MBA. “Refinance applications jumped, as the 30-year fixed mortgage rate declined to its lowest level since February 2021, and the 15-year rate fell to another record low dating back to 1990. Refinances for conventional loans increased over 11%.”
Refinance activity has increased to 67.2% of total applications, up from 64.9% one week earlier.
“The purchase index decreased for the second week in a row to its lowest level since May 2020 and has now declined on an annual basis for the past three months,” Kan said. “Potential buyers continue to be put off by extremely high home prices and increased competition. The FHFA reported yesterday that May home prices were 18% higher than a year ago, continuing a seven-month trend of unprecedented home-price growth.”
