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Robust Purchase Business Drives Up Mortgage Apps

Mortgage News

More people applied for a loan to finance a home purchase than during any week in the last seven years — driving up overall mortgage applications.

In the week that ended on June 2, the Market Composite Index moved up 7 percent from the prior week on a seasonally adjusted basis.

Without seasonal adjustments, the index —
a measure of retail residential loan application volume — tumbled 15 percent from the previous week.

The index was included in the Mortgage Bankers Association’s
Weekly Mortgage Applications Survey. The survey reportedly covers more than three-quarters of all applications.

MBA said applications for refinances rose 3 percent from the week ended May 26. Refinance share, meanwhile, thinned to 42.1 percent from 43.2 percent a week earlier
and 53.8 percent a year earlier.

A seasonally adjusted 10 percent surge from the last report was recorded for
purchase-money applications. That put purchase volume at the highest level since May 2010. But without adjusting for seasonal factors, purchase activity sank 14 percent, though it still ascended 6 percent from the week ended June 3, 2016.

Applications for mortgages insured by the Federal Housing Administration accounted for 10.6 percent of the latest activity, slightly more than the 10.5 percent share in the prior report but much less than 13.0 percent a year prior.

Another 11.1 percent of applications were for loans guaranteed by the Department of Veterans Affairs. VA share was fatter than 10.8 percent in the report from seven days ago
but not as wide as 11.5 percent twelve months earlier.

According to the trade group, applications for adjustable-rate mortgages made up 7.4 percent of total applications. ARM share was more narrow than 7.7 percent during the preceding week but widened from 5.0 percent the same week in the preceding year.

Jumbo interest rates were 6 basis points lower than conforming rates. The jumbo-conforming spread was unchanged from the previous week and much wider than 2 BPS one year previous.

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