Applications' Ups and Downs Continue with an Upswing

Continuing its pattern of alternating between upward and downward movements, the Mortgage Bankers Association's Market Composite Index for the week ended June 25 rose as lower rates drove an increase in refinance applications. The MCI increased by 8.8% on a seasonally adjusted basis and by 8.3% on an unadjusted basis when compared with the previous week. The Refinance Index increased 12.6% to its highest point since May 22, 2009. However, the low rates had little impact on home purchase volume as the seasonally adjusted Purchase Index decreased 3.3%. Michael Fratantoni, MBA vice president of research and economics, commented that even though the 15-year fixed rate mortgage hit its lowest point ever in the group's survey, refis are at only half the level seen in Spring 2009. He added the decline in purchase applications, the seventh in eight weeks, is keeping that index near a 13-year low. The refinance share of mortgage activity increased to 76.8% this week from 73.8% of total applications last week, reaching its highest point since April 2009. The adjustable-rate mortgage share of activity fell to 4.7% from 4.9%. The average contract interest rate for the 30-year fixed rate mortgage fell to 4.67% (its lowest point since April 24 last year) from 4.75% for the preceding week with points decreasing to 0.96 from 1.07 (including the origination fee) for loans with an 80% percent loan-to-value ratio, according to the association. The average contract interest rate for 15-year FRMs fell 13 bps during the week to 4.06%, its lowest point since MBA started tracking this rate. The average contract interest rate for one-year ARMs was unchanged at 7.05%.