The refinance index fell 3% from the prior week but remained 23% higher than the same week a year earlier, and the refinance share of mortgage activity declined to 46.1%. The seasonally adjusted purchase index rose 0.1% while the unadjusted purchase index decreased 2% week-over-week and was 23% higher year-over-year. Mortgage rates ticked up, with the 30-year fixed averaging 6.68%. VA applications dropped 16%, reducing overall applications. ARM share fell to 8.6%, FHA share rose to 19.1% and USDA share edged to 0.6%. FHA refinance activity increased as FHA rates stayed relatively competitive.
The unadjusted purchase index decreased 2% compared with the previous week and was 23% higher than the same week a year ago. Mortgage rates increased slightly last week, with the 30-year fixed rate now at 6.68%. Applications were down as a result, driven by a 16% decrease in VA applications, which are a typically volatile segment of the market, said Joel Kan, MBA's vice president and deputy chief economist.
The Federal Housing Administration (FHA) share of applications increased to 19.1%, up from 18.4% the week prior, while the U.S. Department of Veterans Affairs (VA) share of applications decreased from 14.2% to 13.4%. The U.S. Department of Agriculture (USDA) share of applications increased from 0.5% to 0.6% during the week. FHA refinance applications increased over the week, as the FHA rate, at 6.39%, remained competitive relative to other loan types, Kan added.
Purchase applications were little changed over the week but were at the strongest pace in four weeks and continued to run well ahead of last year's pace. Prospective homebuyers remain more active compared to last year despite economic headwinds and uncertainty and affordability challenges. The average contract interest rate for 30-year fixed-rate mortgages increased by 1 basis point to 6.68%. Jumbo mortgage rates, however, dropped 6 bps to 6.64%.
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