Mortgage applications increased 14.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 1, driven by a surge in refinance applications.
The Market Composite Index, a measure of mortgage loan application volume, increased 14.2 percent on a seasonally adjusted basis from one week earlier. The Refinance Index increased 21 percent from the previous week to the highest level since January 2015. The refinance share of mortgage activity increased to 61.6 percent of total applications, the highest level since February 2016, up from 58.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6 percent of total applications.
“Interest rates continued to drop last week as markets assessed the impact of Brexit, downgrading the likelihood of additional rate hikes by the Fed, and mortgage rates for 30-year conforming loans dropped to their lowest level in over 3 years,” MBA Chief Economist Mike Fratantoni said in a press release.
The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 23 percent higher than the same week one year ago.
The FHA share of total applications decreased to 9.5 percent from 10.6 percent the week prior. The VA share of total applications increased to 12.8 percent from 12.2 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.
Mortgage interest rates for 30-year loans reached their lowest levels in at least three years, according to the survey.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since May 2013 at 3.66 percent.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to its lowest level since January 2011 at 3.67 percent.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to its lowest level since May 2013 at 3.56 percent.