Despite historically low rates, mortgage applications fell 5.1% last week, according to a survey from the Mortgage Bankers Association.
The refinance index fell 7% from one week earlier, however, remained 84% higher than the same week a year ago when rates were over 4%. Last week also marked 11 straight weeks of year-over-year gains for refinance activity.
As refinances fell, the refinance share of mortgage activity also declined to 63.9% of total applications from 65.1% the previous week.
“MBA’s forecast calls for rates to remain at these low levels, which will continue to spur strong refinance activity and offer homeowners relief in the form of lower monthly mortgage payments during these uncertain economic times,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
The unadjusted purchase index fell by 2% from the previous week, but remained 20% higher than a year ago. Much like refinance activity, purchase activity also rose year-over-year for 11 straight weeks.
“Purchase loan balances continued to climb, which is perhaps a sign that the still-weak job market and tighter credit for government loans are constraining some first-time homebuyers,” Kan said.
The share of total applications for VA, FHA, and USDA loans came to a standstill as all remained unchanged from the week prior at 11.2%, 9.6%, and .6%, respectively.
The adjustable-rate mortgage (ARM) share of activity fell last week to 3.1% of total applications from 3.2%.
Here is a more detailed breakdown of this week’s mortgage application data:
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) fell to 3.14% from 3.2%.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) fell to 3.51% from 3.52%.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.27%.
- The average contract interest rate for 15-year fixed-rate mortgages fell to 2.73% from 2.76%.
- The average contract interest rate for 5/1 ARMs increased from 3.08% to 3.09%.