Stable mortgage rates and the summer buying season ensured the increase in mortgage applications during the week. According to the Weekly Mortgage Applications Survey by the MBA, apps rose 4.2 percent from the prior week. Mortgage applications had been declining over the past few months, but this week both the purchase and refinance indexes saw an uptick, the survey indicated.
On an unadjusted basis, the market composite index, which is a measure of mortgage loan application volume, increased three percent from a week ago.
While purchase index for applications increased 3 percent during the week, the refinance index rose six percent from the prior week. The refinance share of mortgage activity also increased during the week to 38.7 percent of total applications from 37.6 percent last week. The adjustable-rate mortgage (ARM) share of activity increased to 6.5 percent of total applications, the survey said.
Among purchase loans, applications for FHA, VA, and USDA loans saw a decrease compared to the previous week. While FHA loans declined to 10.2 percent, the VA share of total applications decreased to 10.5 percent. USDA loan applications also decreased slightly from 0.8 percent to 0.7 percent.
In terms of average contract interest rates, the rate for 30-year fixed-rate mortgages with conforming balances remained unchanged at 4.81 percent as did its effective rate. However, the rate for 30-year fixed-rate mortgages with jumbo balances decreased to 4.68 percent from 4.72 percent last week. The effective rate for these loans also decreased during the week.
For FHA backed 30-year fixed-rate mortgages, the rate increased to 4.82 percent from 4.77 percent last week. It's effective rate also saw an uptick.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.25 percent from 4.27 percent, with its effective rate decreasing from last week.
For 5/1 ARMs, the average contract rate decreased to 4 percent from 4.06 percent during the week. It's effective rate also decreased from last week.