Mortgage application activity flat, but FHA refi volume soars
Mortgage application activity was virtually flat from one week earlier, down just 0.1%, although there was a huge gain in Federal Housing Administration refinance volume, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending June 28 found that the refinance index decreased 1% from the previous week, while the refinance share of mortgage activity decreased to 51% of total applications from 51.5%.
"Conventional refinances dropped slightly over the week, but there was a pick-up in government refinances, with FHA activity jumping 17%," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "Additionally, the average loan amount for government refinance applications reached another survey high at $282,500. In a week of mixed mortgage rate movements across the various loan types, the 30-year fixed rate finished slightly higher than last week, but was still close to lows last seen in 2016."
The purchase index rose by 1% over the previous week on both a seasonally adjusted and an unadjusted basis.
"Purchase applications picked up slightly last week, as conventional and government activity were each up around 1%. Furthermore, in continuation of the gradual growth trend seen throughout the first half of 2019, purchase activity was almost 10% higher than a year ago. A still-strong job market, improving affordability and lower mortgage rates continue to support growth," Kan added.
Adjustable-rate mortgage activity decreased to 5.2% from 6.5% of total applications, while the share of Federal Housing Administration-insured loan applications increased to 10.1% from 9.6% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 12.8% from 12.5% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.6% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased 1 basis point to 4.07%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate remained unchanged at 4%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 4 basis points to 3.97%. The average contract interest rate for 15-year fixed-rate mortgages increased 2 basis points to 3.42%. The average contract interest rate for 5/1 ARMs decreased 4 basis points to 3.46%.