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Loan applications improved compared to the previous week, according to data from the weekly survey of loan applications by the Association of Mortgage Bankers for the week ending Friday, June 24.
The composite index of the MBA market, which measures the number of applications for mortgage loans, increased by 0.7% compared to the previous week on a seasonally adjusted basis. Without change, this is a 20% reduction.
The refinancing index, which includes refinancing and early payments, rose 2% from the previous week and 80% lower than in the same week last year.
The purchase index, which includes all loan applications for the purchase of family houses, increased slightly by 0.1% on a seasonally adjusted basis compared to the previous week.
Without change, this is a decrease of 21% compared to last week and 24% compared to the same week in 2021.
“Mortgage rates continue to change significantly. After adding 65 basis points over the last three weeks, the 30 – year fixed rate fell by 14 basis points last week to 5.84%.
Rates are even higher than a year ago when the 30 – year fixed rate was at 3.2%, “said Joel Kan, Associate Vice President of Economic and Industrial Forecasting at the MBA. However, refinancing is less than 80% less than a year ago and more than 60% below the historical average.
“Overall purchasing activity has weakened in recent months due to rapid jumps in interest rates on loans, high real estate prices, and growing economic uncertainty,” Khan added.
The average purchase price dropped to $ 413,500, a steadily declining trend from a record $ 460,000 in March 2022.
The share of loan refinancing increased by 30.3% in total applications, by 0.6% compared to the previous week, as well as the share of ARM activity fell to 10.1% in total applications.
The share of FHA in total applications did not move from the 12% reported last week, while the share of VAs in applications increased by 11.2% from 10.7% last week.
In addition, the share of USDA applications increased by 0.6% from 0.5% last week. The MBA survey also reveals the latest average contract rate for the following types of loans and shows effective rates overall:
- A 30-year fixed-rate mortgage with loan balances of $ 647,200 or less: reduced to 5.84% from 5.98%, with points also reduced to 0.64 from 0.77 (including initial fee) for loans of 80 % of loan value (LTV)
- 15-year fixed-rate mortgage: increased to 5.06% from 5.05%, with points reduced to 0.72 from 0.68 (including initial fee) for a loan with 80% LTV
- 5/1 ARM, average rate reduced to 4.64% from 4.78%, with points reduced to 0.72 from 0.84 (including creation fee) for a loan with 80% LTV
The results of the survey from this week have been adjusted to take into account the June holiday, the MBA said.
Reference Source: MPA
