According to the Mortgage Bankers Association's latest Weekly Applications Survey for the week ending June 7, 2024, U.S. mortgage applications rose by 15.6 percent from the previous week.
The Market Composite Index, which measures mortgage loan application volume, saw a 15.6 percent increase on a seasonally adjusted basis and a 26 percent rise on an unadjusted basis compared to the previous week.
The Refinance Index jumped by 28 percent from the previous week and was also 28 percent higher than the same week last year. The seasonally adjusted Purchase Index went up by 9 percent from one week earlier, while the unadjusted Purchase Index increased by 19 percent compared to the previous week but was 12 percent lower than the same week one year ago.
"Mortgage rates trended lower over the past week until a stronger than expected employment report caused a rebound. The weekly average for the 30-year fixed mortgage rate decreased to 7.02 percent," stated Mike Fratantoni, MBA's SVP and Chief Economist. "Earlier in the week, lower rates led to a significant increase in refinance activity, particularly among VA borrowers who took advantage of the chance to lower their rates. Overall, refinance activity was more than 27 percent above the level one year ago."
Fratantoni added, "On a seasonally adjusted basis and compared to the holiday-adjusted level from the previous week, purchase activity also increased. Multiple data sources indicate that home inventory levels, while still historically low, have risen significantly from last year. This is encouraging news for prospective homebuyers who have been frustrated by the limited availability of homes."
The refinance share of mortgage activity grew to 35.2 percent of total applications, up from 31.1 percent the previous week. The share of adjustable-rate mortgage (ARM) activity decreased to 6.3 percent of total applications.
The FHA share of total applications slightly decreased to 13.1 percent from 13.2 percent the previous week. The VA share increased to 14.7 percent from 12.1 percent, and the USDA share rose to 0.4 percent from 0.3 percent.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) dropped to 7.02 percent from 7.07 percent, with points remaining unchanged at 0.65 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate also decreased from the previous week.
For 30-year fixed-rate mortgages with jumbo loan balances (over $766,550), the average contract interest rate fell to 7.18 percent from 7.21 percent, with points rising to 0.54 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA stayed at 6.87 percent, with points decreasing to 0.92 from 0.96 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from the previous week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.60 percent from 6.75 percent, with points dropping to 0.55 from 0.63 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased.
Finally, the average contract interest rate for 5/1 ARMs increased to 6.45 percent from 6.37 percent, with points rising to 0.81 from 0.63 (including the origination fee) for 80 percent LTV loans. The effective rate increased from the previous week.