Last week, mortgage rates fell to a three-year low, but not even this decline was enough to spur growth in purchase activity volume, according to new data from the Mortgage Bankers Association.
On an unadjusted basis, the Market Composite Index slid 0.1% for the week ending June 28, 2019, according to MBA's weekly Mortgage Applications Survey.
“Purchase applications picked up slightly last week, as conventional and government activity were each up around 1%. Furthermore, in continuation of the gradual growth trend seen throughout the first half of 2019, purchase activity was almost 10% higher than a year ago,” MBA Vice President of Economic and Industry Forecasting Joel Kan said. “A still-strong job market, improving affordability and lower mortgage rates continue to support growth.”
The Refinance index fell 1% from the previous week and the unadjusted Purchase Index also slipped 1% from a week ago but remained 10% higher than the same week in 2018. Lastly, the seasonally adjusted Purchase Index ticked up 1% from the week before.
“Conventional refinances dropped slightly over the week, but there was a pick-up in government refinances, with FHA activity jumping 17%,” Kan said. “Additionally, the average loan amount for government refinance applications reached another survey high at $282,500. In a week of mixed mortgage rate movements across the various loan types, the 30-year fixed rate finished slightly higher than last week but was still close to lows last seen in 2016.”
Here's a more detailed breakdown of this week's mortgage application data:
- The refinance share of mortgage activity dropped to 51% from last week’s 51.5%.
- The adjustable-rate mortgage share of activity retreated to 5.2% of total applications.
- The Federal Housing Administration's share of mortgage apps rose from last week’s 9.6% to 10.1%.
- The Department of Veterans Affairs' share of applications moved forward to 12.8% from last week’s 12.5%.
- The Department of Agriculture's share of total applications held steady from last week’s 0.6%.
- Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) crawled forward from last week’s rate of 4.06% to 4.07%.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) held its ground from last week’s 4%.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell from last week’s 4.01% to 3.97%.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 3.42% from 3.4% the week prior.
- The average contract interest rate for 5/1 ARMs decreased to 3.46% from last week’s 3.5%.