Mortgage rates are expected to drop even further below the record lows witnessed right now and this year, but you wouldn’t think so looking at the latest mortgage application report from the Mortgage Bankers Association.
In the wake of the news surrounding Brexit, Erin Lantz, Zillow vice president of mortgages, said, “We expect mortgage rates to reach historic lows in the wake of the Brexit vote, as investors flock to relatively safer investments in U.S. mortgage-backed securities.”
However, this doesn’t seem to be spurring people into homeownership, at least not yet.
According the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 24, mortgage applications actually decreased 2.6% from one week earlier, completely undoing the 2.9% increase last week.
Last week’s increase was driven by a jump in the refinance index, which failed to post a rise this week. Both the Refinance Index and Purchase Index recorded a dip, dropping 2% and 3%, respectively.
The refinance share of mortgage activity slightly increased, growing to 58.1% of total applications from 57.7% the previous week. The adjustable-rate mortgage share of activity increased to 5.9% of total applications.
The Federal Housing Administration’s share of total applications decreased to 10.6% from 11.7% the week prior, while the Veteran Affairs’ share of total applications increased to 12.2% from 11.1% the week prior. The United States Department of Agriculture’s share of total applications increased to 0.7% from 0.6% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) dropped to its lowest level since May 2013, falling to 3.75% from 3.76% the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.74% from 3.70%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA stayed at 3.61%.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.02% from 3.04%, as the average contract interest rate for 5/1 ARMs decreased to 2.88% from 2.92%.