The Federal Housing Administration's increase in mortgage insurance premiums for streamline refinancings dragged down the amount of government loan applications and in turn total loan applications for the week ended June 22, according to the Mortgage Bankers Association. Application volume is down 7.1% on a seasonally adjusted basis from the prior week.
The Refinance Index decreased 8% from the previous week, while the Purchase Index decreased 1% on a seasonally adjusted basis. The unadjusted Purchase Index was almost 3% lower than the same week one year ago.
Michael Fratantoni, MBA’s vice president of research and economics, commented government loan refi apps submitted had "more than doubled" in the prior week with FHA refi volume hitting an all-time high. “The large swings in activity were due to the implementation of FHA’s new premiums on streamline refinances, and borrowers timing their applications to lower their premiums.”
The refi share of apps fell to 79% from 81% in last week's survey.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) came off its all-time low and increased by one basis point from the previous week to 3.88%. The average contract interest rate for 30-year Federal Housing Administration-insured loans declined by one basis point to 3.71%.
The rate for 30-year FRMs with jumbo loan balances, also at an all-time low last week, rose by six basis points to 4.12%. The average contract interest rate for 15-year FRMs declined one basis point to 3.24%.
