A host of factors are impacting purchase activity
Mortgage applications have fallen 4% from last week, according to the Mortgage Bankers Association.
Data from MBA’s Mortgage Applications Survey show that overall loan application volume decreased for the second consecutive week, down 4% on a seasonally adjusted basis and down 5% on an unadjusted basis.
“Mortgage applications decreased for the second week in a row, with the overall index reaching its lowest level since February 2020,” said Joel Kan, associate vice president of economic and industry forecasting at MBA. “Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity.”
Demand for both refinance and purchase loans faltered this week. The refinance index was down 5% week over week, but was 6% higher than the same period in 2020. The seasonally adjusted purchase index dipped 3%. Unadjusted, the index dropped 5% week over week and declined 2% year over year. MBA noted that this week’s year-over-year results were compared to the week of Memorial Day last year.
The refi share of mortgage activity decreased one basis point to 61.3% of total applications, while adjustable-rate mortgage applications decreased to 3.7% of totals.
The average contract interest rate for 30-year fixed mortgages with conforming loan balances decreased to 3.17% from 3.18%. Thirty-year fixed mortgages with jumbo loan balances increased to 3.34% from 3.30%.
“The government purchase index declined to its lowest level in over a year and has now decreased year-over-year for five straight weeks. Purchase applications were down almost 2% from a year ago, but that was compared to the week of Memorial Day 2020,” Kan said. “Refinance activity dropped for the second straight week, even as the 30-year fixed-rate decreased slightly to 3.17%. Even though rates have been below 3.20% over the past month, they are still around 20-30 basis points higher than the record lows in late 2020.”
