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Purchase mortgage applications declined for the second straight week after two months 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 26 decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 15 percent higher than the same week one year ago.
“Mortgage applications fell last week despite mortgage rates hitting another record low in MBA’s survey. Investors are contemplating the risks of the recent resurgence of COVID-19 cases to the labor market and economy, and Treasury rates and mortgage rates are moving lower as a result,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “After two months of strong growth, purchase applications declined for the second week in a row. The weakening in activity is potentially a signal that pent-up demand is starting to wane and that low housing supply is limiting prospective buyers’ options. The average purchase application loan size increased to a record high in our survey – more proof that tight inventory conditions are leading to faster price growth.”
The Refinance Index decreased 2 percent from the previous week and was 74 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 61.2 percent of total applications from 61.3 percent the previous week.
“Refinance applications also decreased but remained 74 percent higher than a year ago,” Kan said. “The 30-year fixed rate has been below the 3.5 percent mark since late March. It is possible that many borrowers have already refinanced or are waiting for rates to go even lower.”
Overall, the Market Composite Index, a measure of mortgage loan application volume, decreased 1.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week.
