Mortgage application activity down due to mixed economic news
Mortgage applications fell by nearly 5% last week as concerns over foreign trade and tariffs outweighed other positive economic news, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending June 22 found that the refinance index decreased by 4% from the previous week. The refinance share of application activity increased to 37.6% from 36.8% the previous week.
"Concerns over trade between the U.S. and China persisted last week. This caused Treasury rates to decrease by 5 basis points," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "And, these concerns outweighed positive news on housing starts and a generally bullish view on second quarter U.S. growth."
The seasonally adjusted purchase index decreased by 6% from one week earlier, while the unadjusted purchase index decreased by 7% compared to the previous week and was 1% higher than the same week one year ago.
Adjustable-rate loan activity decreased to 6.5% from 7% of total applications, while the share of Federal Housing Administration-guaranteed loans increased to 10.2% from 10.1% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 10.7% from 10.2% and the U.S. Department of Agriculture/Rural Development share increased to 0.8% from 0.7% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased 1 basis point to 4.84%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate decreased 9 basis points to 4.7%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 1 basis point to 4.81%. For 15-year fixed-rate mortgages the average increased 2 basis points to 4.29%.
The average contract interest rate for 5/1 ARMs decreased 5 basis points to 4.01%.