Purchase mortgage applications declined last week after nine weeks of growth, according to the Mortgage Bankers Association’s latest survey.
The MBA’s seasonally adjusted Purchase Index, part of its Weekly Mortgage Applications Survey, showed that purchase mortgage applications for the week ending June 19 decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 18 percent higher than the same week one year ago.
“Even with high unemployment and economic uncertainty, the purchase market is strong. Activity has climbed above year-ago levels for five straight weeks and was 18 percent higher than a year ago last week,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “One factor that may potentially crimp growth in the months ahead is that the release of pent-up demand from earlier this spring is clashing with the tight supply of new and existing homes on the market. Additional housing inventory is needed to give buyers more options and to keep home prices from rising too fast.”
The Refinance Index decreased 12 percent from the previous week and was 76 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 61.3 percent of total applications from 63.2 percent the previous week.
Overall, the Market Composite Index, a measure of mortgage loan application volume, decreased 8.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 9 percent compared with the previous week.
“Mortgage applications decreased 9 percent last week, with both refinance and purchase activity falling despite the 30-year fixed rate mortgage staying at 3.30 percent – the record low in MBA’s survey,” Kan said. “Refinance applications dropped to their lowest level in three weeks, but the index remained 76 percent higher than a year ago.”
Kan added that, despite last week’s declines, the MBA still anticipates refinance originations to increase to $1.35 trillion in 2020, the highest level since 2012.
The FHA share of total applications increased to 11.4 percent from 11 percent the previous week. The VA share of total applications decreased to 11.0 percent from 11.5 percent the week prior.
