Mortgage applications surged 15.6% from a week ago, According to data Mortgage Bankers Association(MBA) Weekly Application Survey for the week ending June 7.
On an unadjusted basis, the market composite index rose 26% from the previous week. The refinancing index rose 28% from the previous week and was also up 28% from the same week a year ago. The seasonally adjusted purchasing index rose 9% from a week ago. The unadjusted purchase index rose 19% from the previous week, but was still down 12% from the same week a year ago.
“Mortgage rates were trending lower last week until a stronger-than-expected jobs report led to a rebound, with the weekly average for the 30-year fixed mortgage rate falling to 7.02 percent,” said Mike Fratantoni, senior vice president at MBA. “Earlier in the week it was lower. Low interest rates mean a strong increase in refinancing activity, especially for VA borrowers, who have taken advantage of lower interest rates. Overall refinancing activity is up more than 27% from a year ago.
He added: “On a seasonally adjusted basis, buying activity has also increased compared to the previous week’s holiday-adjusted levels. Multiple sources now indicate that housing inventory levels, while still historically low, are up significantly from this time last year. .This is good news for many potential homebuyers who are frustrated by the lack of homes on the market.
The refinance share of mortgage activity increased to 35.2% of total applications from 31.1% the previous week. The share of adjustable-rate mortgage (ARM) activity fell to 6.3% of total applications.
FHA’s share of total applications fell to 13.1% from 13.2% the previous week, but VA’s share increased to 14.7% from 12.1% the previous week.
The average contract interest rate for a 30-year fixed-rate mortgage with qualifying loan balance ($766,550 or less) fell from 7.07% to 7.02% with an unchanged 0.65 points (including origination fee) for an 80% loan-to-value ratio ( LTV ) loan.
The average contract interest rate for a 5/1 ARM increased from 6.37% to 6.45%, and the points for an 80% LTV loan increased from 0.63 (including origination fee) to 0.81. The effective rate has increased compared with last week.
