As rates for most loan types increased, mortgage applications fell to their lowest level in a month last week.
For the week that ended June 30, mortgage applications fell 4.4% from the prior week, according to data from the Mortgage Bankers Association.
“As mortgage-Treasury spreads remained wide, the 30-year fixed rate increased to 6.85%, the highest rate since the end of May,” said Joel Kan, MBA’s vice president and deputy chief economist. “Purchase applications decreased for the first time in a month, as homebuyers remained sensitive to rate changes. Rates are still over a percentage point higher than a year ago, and housing affordability is still a challenge in many parts of the country.”
Reduced purchase activity in some high-price markets and more activity in some of the lower price tiers might be responsible for this average loan size drop, explained Kan.
Last week, mortgage rates increased for most loan types, with the 30-year fixed rate increasing to 6.85% from 6.75%, per the MBA’s data. On the other hand, the jumbo rate was higher than the conforming rate for the fourth week in a row. The MBA data showed that for jumbo loan balances (greater than $726,200), the rate jumped to 6.95% from 6.91% last week.
At Mortgage News Daily, mortgage rates were higher on Wednesday, at 7.08%.
Purchase applications decreased for the first time in a month, the purchase index decreased by 4.4% from one week earlier and was 22% lower than last year’s level on an unadjusted seasonal basis. Refinancing applications decreased 4% last week compared to the previous week and were 30% lower than the same week one year ago. However, the refinance share of mortgage activity increased to 27.4% of total applications from 27.2% the prior week.
The Federal Housing Administration loans’ share increased to 13% from 12.9% the week prior. The U.S. Department of Veteran Affairs loans’ share decreased to 11.7% from 12.2% the week prior. And the U.S. Department of Agriculture loans’ share remained unchanged at 0.4% of the total applications.
