Mortgage apps flat even as refis tick up

Refinancing applications were back to 30% of the total last week, according to MBA

A drop in mortgage rates led refinancing applications to increase slightly last week, back to a 30% share of the total, according to the latest Mortgage Bankers Association (MBA) survey for the week ending June 24.

Overall, mortgage apps increased 0.7% on a seasonally adjusted basis from one week earlier, though they came in 49.4% lower than the same week in 2021.

“Mortgage rates continue to experience large swings. After increasing 65 basis points during the past three weeks, the 30-year fixed rate declined 14 basis points last week,” Joel Kan, associate vice president of economic and industry forecasting for the trade group, said in a statement. “The decline in mortgage rates led to a slight increase in refinancing, driven by an uptick in conventional loans.”

Refis rose 1.9% from the prior week and declined 74.5% year-over-year. Meanwhile, the seasonally adjusted purchase index was relatively flat, increasing only 0.12% from the prior week, but 4.7% down from the same week a year ago.

“Purchase activity has weakened in recent months due to the quick jump in mortgage rates, high home prices, and growing economic uncertainty,” Kan said. “Purchase applications were essentially flat last week but were supported by a 6% increase in government loans.”

Kan noted that the average purchase loan amount, after reaching the $460,000 record in March 2022, declined to $413,500 last week.

How lenders can navigate a shifting market with non-QM loan options

In an effort to counter margin compression and satisfy a new generation of homebuyers, lenders are looking to offer loan options that better fit the average borrower. HousingWire recently spoke with John Keratsis, President and CEO of Deephaven Mortgage, about the potential benefits of non-QM lending in today’s tight housing market.  

Presented by: Deephaven 

On Tuesday, another index, Black Knight‘s Optimal Blue OBMMI had rates for a 30-year fixed-rate mortgage at around 5.93%.

Refis were 30.3% of total applications last week, increasing from 29.7% the previous week, the survey shows. The adjustable-rate mortgages (ARM) share of applications declined from 10.6% to 10.1%, still demonstrating continued popularity among borrowers. The average interest rate for a 5/1 ARM fell to 4.64% from 4.78% a week prior, according to the MBA.

The FHA share of total applications remained unchanged at 12%. Meanwhile, the VA share went from 10.7% to 11.2%. The USDA share of total applications increased to 0.6% from 0.5% the week prior. 

The trade group estimates the average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) decreased to 5.84%, from 5.98% the previous week. For jumbo mortgage loans (greater than $647,200), it went to 5.42% from 5.49%.

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