Survey: Loan Applications Drop in Latest Week

The Mortgage Bankers Association's Market Composite Index over the past few weeks has been moving in a zigzag pattern and the latest week's decline was no exception. During the week ended June 18, the MCI once again "zagged" downward, this time decreasing 5.9% on a seasonally adjusted basis and by 6.0% on an unadjusted basis when compared with the previous week. The Refinance Index decreased 7.3% and the seasonally adjusted Purchase Index decreased 1.2%. MBA said the decline in total purchase applications is driven by a 4.4% decrease in government applications, while conventional purchase applications increased by 1.0%. The refinance share of mortgage activity decreased to 73.8% of total applications from 74.8% the previous week, while the adjustable-rate mortgage share of activity fell to 4.9% from 5.2%. The decline in application volume occurred even as the average contract interest rate for the 30-year fixed-rate mortgage fell to 4.75% from 4.82% for the current week with points increasing to 1.07% from 0.89 (including the origination fee) for loans with an 80% percent loan-to-value ratio, according to the association. The average contract interest rate for 15-year FRMs fell 4 basis points during the week to 4.19%, and the average contract interest rate for one-year ARMs showed a 2 bps decline to 7.05%.