Mortgage applications decreased by just under 1% for the week ending June 15, but FHA refinancings soared—thanks mostly to the agency’s new “Streamline” program.
According to new figures compiled by the Mortgage Bankers Association, refis—not surprisingly—accounted for 81% of all new business compared to 79% the week prior.
"Refinance volume increased again last week, but the composition of activity changed markedly,” said MBA vice president of research and economics, Michael Fratantoni. “Despite rates remaining near all-time lows, conventional refinance application volume declined, and the HARP share of refinance activity dropped to 20%.”
But the real star of the week was clearly FHA, he said, with applications more than doubling and exploding to an all-time high. “New, lower FHA premiums on streamlined refinance loans came fully into effect, and borrowers seized the opportunity to lower their mortgage rates without increasing their FHA premiums,” he said.
During May the investor share of applications for home purchase was at 6%, unchanged from April.
The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balances ($417,500 or less) decreased to 3.87% during the week.
The trade group tracks activity through its proprietary Market Composite Index. MBA says its survey covers 75% of all U.S. retail residential loan applications.
