Mortgage interest rates remained near historic lows this week, and the result was a jump in the number of applications.
This week’s Primary Mortgage Market Survey from Freddie Mac showed average fixed mortgage rates largely unchanged from the week ending June 18. Rates for 30- and 15-year fixed mortgages averaged 3.56 and 2.83 percent, respectively, and were both up by half a percent from last week. Fifteen-year Treasury-indexed hybrid adjustable-rate mortgages also remained largely flat at 2.74 percent.
The result, according to the latest Market Composite Index report from the Mortgage Bankers Association (MBA), was a 2.9 percent jump in mortgage applications, on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week.
According to the MBA, the Refinance Index increased 7 percent from the previous week. The unadjusted Purchase Index decreased 4 percent compared with the previous week, but was 12 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 57.7 percent of total applications, from 55.3 percent the previous week, while the ARM share increased to 5.7 percent of total applications.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since May 2013, 3.76 percent, from 3.79 percent, with points increasing to 0.33 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to its lowest level since January 2011, 3.70 percent, from 3.75 percent, with points increasing to 0.28 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
“The low rates continue to be good news for the housing market, “ said Sean Becketti, chief economist at Freddie Mac. “Existing home sales rose 1.8 percent to a 5.53 million seasonally adjusted annual rate in the month of May -- the highest level since February 2007."
The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Authority remained unchanged from 3.61 percent, while average contract interest rate for 15-year fixed-rate mortgages decreased to 3.04 percent from 3.06 percent since last week, according to the MBA.