Purchase, refi apps both rise in same week for first time since March
Mortgage applications increased 9.3% from one week earlier, fueled by low mortgage rates and the release of pent-up demand, according to the Mortgage Bankers Association.
It was the first time since the week of March 6, before the nation shut down because of the coronavirus outbreak, that both purchase and refinance application activity rose in the same week.
The MBA's Weekly Mortgage Applications Survey for the week ending June 5 found that the refinance index increased 11% from the previous week and was 80% higher than the same week one year ago. The previous week's results included an adjustment for the Memorial Day holiday.
The refinance share of mortgage activity increased to 61.3% of total applications from 59.5% the previous week.
"Fueled again by low mortgage rates, pent-up demand from earlier this spring, and states reopening across the country, purchase mortgage applications and refinances both increased. The recovery in the purchase market continues to gain steam, with the seasonally adjusted index rising to its highest level since January. Purchase activity increased for the eighth straight week," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release.
The seasonally adjusted purchase index increased 5% from one week earlier, while the unadjusted purchase index increased 15% compared with the previous week and was 13% higher than the same week one year ago.
"Refinances moved higher for the first time in nearly two months, with both conventional and government applications rising and the overall index coming in 80% above year-ago levels," Kan said.
Adjustable-rate mortgage activity decreased to 3.1% from 3.5% percent of total applications, while the share of Federal Housing Administration-insured loan applications increased to 11.5% from 11.2% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 12.3% from 12% and the U.S. Department of Agriculture/Rural Development share decreased to 0.6% from 0.7% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased 1 basis point to 3.38%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400), the average contract rate increased 4 basis points to 3.7%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 8 basis points to 3.38%. For 15-year fixed-rate mortgages, the average decreased 2 basis points to 2.83%. The average contract interest rate for 5/1 ARMs decreased 3 basis points to 3.02%.