Data released Wednesday showed that refinancing applications increased as mortgage rates fell last week, but home purchase loan activity increased only slightly. Mortgage Bankers Association (Master of Business Administration).
MBA’s survey, which covers 75% of all retail residential mortgage applications in the United States, found that the seasonally adjusted refinance index increased 16% in the week ended August 2 from the previous week. Taking into account filings from the same week a year ago, the index rose 59%.
Meanwhile, the seasonally adjusted purchasing index rose 1% from a week ago but was down 11% from a year ago. As a result, the overall MBA application index rose 6.9% week-on-week and 10.6% higher than the same period last year.
“Mortgage rates fell across the board last week and mortgage application volumes reached their highest level since January of this year,” Joel Kan, MBA vice president and deputy chief economist, said in a statement.
Naoto Kan says lower rates are due to “dovish communication from government” United States Federal Reserve The weak jobs report heightened concerns that the economy is slowing faster than expected.
house lineMortgage Rate Center It showed the average interest rate on a 30-year conforming loan was 6.77% on Wednesday, down from 7.01% a week ago.. The 15-year qualifying rate, which has been volatile recently, averaged 6.38% on Wednesday, down 49 basis points (bps) from a week ago.
MBA’s survey shows that the average contract interest rate on 30-year fixed-rate conforming loans (with balances of $766,550 or less) fell to 6.55% in the week ended Aug. 2, down 27 basis points from the previous week. The average interest rate for jumbo loans (balances over $766,550) fell 30 basis points to 6.77%.
“Refinancing applications increased across all loan types due to lower interest rates, especially for VA loans, which were up nearly 60% year over year and reached their highest level in two years,” Kan said.
“Despite falling interest rates, there was only a modest increase in purchasing activity, with an increase in traditional purchase applications offset by a decline in government purchase applications,” Kan added. “For-sale inventories are beginning to gradually increase in parts of the country, given the impact of falling interest rates. Prospects, homebuyers may be waiting for opportunities to enter the market.”
The surge in refinance applications pushed the refinance share of all applications to 41.2%, up from 38.2% the previous week. U.S. Department of Veterans Affairs (VA) loans accounted for 14.3% of the total, federal housing administration (FHA) loan is 13.4%, U.S. Department of Agriculture (USDA) loan rate is 0.4%.
Adjustable-rate mortgage (ARM) activity increased to 6.3% of total applications.
