With the 30-year average mortgage rate approaching 7% last week, mortgage applications fell for the second consecutive week, down 0.2% from a 2.6% decline the previous week, according to the Mortgage Bankers Association's (MBA) latest Weekly Applications Survey for the week ending July 5, 2024. Last week's results included an adjustment for the Fourth of July holiday.
This week's numbers:
The Market Composite Index, a measure of mortgage application volume, was down 0.2% week-over-week on a seasonally adjusted basis. On an unadjusted basis, the index was down 20% week-over-week. The Refinance Index was down 2% week-over-week and up 28% from the same week a year ago. The Seasonally Adjusted Purchase Index was up 1% week-over-week. The Unadjusted Purchase Index was down 19% week-over-week and down 13% from the same week a year ago. Refinances as a share of mortgage activity decreased to 34.9% of total applications from 35.7% last week. The Adjustable Rate Mortgages (ARMs) share of total applications increased to 6.2% of total applications. The FHA share of total applications decreased to 12.5% from 13.1% last week. The VA share of total applications increased to 13.7% from 12.9% last week. The USDA share of applications increased to 0.4% from 0.3% last week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.00% from 7.03%, and points for 80% LTV loans decreased to 0.60 from 0.62 (including fees). The effective interest rate decreased from last week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (over $766,550) increased to 7.13% from 7.11%, and points for 80% LTV loans decreased to 0.38 from 0.50 (including fees). The effective interest rate decreased from last week. The average contract interest rate for 30-year fixed-rate mortgages insured by the FHA decreased to 6.87% from 6.90%, and points for 80% LTV loans decreased to 0.92 (including fees) from 0.95 (including fees). The effective interest rate decreased from last week. The average contract rate for 15-year fixed-rate mortgages increased from 6.56% to 6.63% as points increased from 0.54 (including fees) to 0.61 for 80% LTV loans. The effective interest rate increased from last week. The average contract rate for 5/1 ARMs decreased from 6.38% to 6.22% as points increased from 0.54 (including fees) to 0.6 for 80% LTV loans.
MBA Perspective:
“The recent increase in mortgage rates has slowed demand,” said Joel Kang, MBA vice president and deputy chief economist. “Mortgage applications were roughly flat last week as interest rates hovered around 7 percent. Purchase activity increased slightly, primarily due to an increase in FHA and VA applications. Refinance applications declined for the fourth consecutive week in line with rising interest rates. Although home equity appreciation has been significant in recent years, most borrowers have little incentive to refinance at current interest rates.”