According to the Mortgage Bankers Association, applications for mortgages declined by -0.8% last week compared with a week earlier. The refinance index rose by 1%, but the purchase index fell by -9%. Here’s the MBA’s take:
Refinance volume increased again last week, but the composition of activity changed markedly. Despite rates remaining near all-time lows, conventional refinance application volume declined, and the HARP share of refinance activity dropped to 20 percent. On the other hand, FHA refinance volume exploded to an all-time high, more than doubling over the week. … Purchase activity fell off last week, but this is likely only a recalibration following the Memorial Day holiday, as the level of activity remains within the narrow band seen for the past 3 years.
Refinancings accounted for 81% of mortgage applications in the week, up from 79% a week earlier. Adjustable rate mortgages accounted for just 4% of the applications.
The average contract interest rate for a 30-year fixed conforming loan fell to 3.87%, equalling the lowest rate in the history of the survey, which has been conducted since 1990. The interest rate on a 30-year jumbo fell to 4.06%, the lowest rate ever, and the average rate on a 15-year fixed-rate mortgage rose slightly from 3.23% to 3.25%.
Yesterday’s report on new housing starts showed an increase in new construction permits, but when added to today’s report on mortgage applications one has to wonder if buyers will show up.