The volume of mortgage loan applications, known as the Market Composite Index, rose by 2.2 percent week over week during the week ending July 3, according to the latest data from the Mortgage Bankers Association (MBA).
The week’s results were adjusted for the Fourth of July holiday and on a seasonal basis. On an unadjusted basis, the Market Composite Index dropped 8 percent compared to the previous week.
Refinance rates increased by 0.4 percent week over week and by 111 percent year-over-year. On a seasonally adjusted basis, the Purchase Index rose 5 percent from the week before. The unadjusted Purchase Index, however, dropped 5 percent from the previous week, and was up 33 percent from the same period one year earlier.
“Mortgage rates declined to another record low as renewed fears of a coronavirus resurgence offset the impacts from a week of mostly positive economic data, such as June factory orders and payroll employment,” Joel Kan, associate vice president of MBA’s economic and industry forecasting, said in a statement.
“The 30-year fixed rate slipped to 3.26 percent — down 53 basis points since late March,” Kan added. “Borrowers acted in response to these lower rates, after accounting for the July 4th holiday. Purchase applications continued their recovery, increasing 5 percent to the highest level in almost a month and 33 percent from a year ago. The average purchase loan size increased to $365,700 — also another high — as borrowers contend with limited supply and higher home prices.”
Refinances decreased to 60.1 percent of total mortgage applications from 61.2 percent the week previous. Meanwhile, adjustable-rate mortgages (ARMs) increased to 3.4 percent of all applications.
The proportion of Federal Housing Administration (FHA) loan applications dropped to 10.9 percent from 11.7 percent the previous week. The share of United States Department of Veterans Administration (VA) loan applications decreased slightly to 10.4 percent from 10.8 percent the week previous. United States Department of Agriculture (USDA) loans modestly increased to 0.7 percent of total applications from 0.6 percent the week prior.
On 30-year fixed-rate mortgages with conforming loan balances (balances of $510,400 or less), the average contract interest rate decreased slightly to 3.26 percent from 3.29 percent the week before. For those 30-year fixed-rate mortgages with jumbo loan balances (balances greater than $510,400), the average contract interest rate declined to 3.52 percent from 3.59 percent the week before.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA declined to 3.31 percent from 3.43 percent the week before. On 15-year fixed-rate mortgages, the average contract interest rate decreased to 2.77 percent from 2.81 percent the week prior.