Volume rose for the week ending June 19, with refinances up even as rates held near 6.6%
Mortgage application volume held its ground in the week ending June 19, rising 1.0% on a seasonally adjusted basis even as the Federal Open Market Committee (FOMC) struck a more hawkish tone at its June meeting, the Mortgage Bankers Association (MBA) reported Wednesday.
Results were adjusted for the Juneteenth holiday; on an unadjusted basis, the MBA's Market Composite Index — a broad measure of loan application volume — fell 10% from the prior week.
The headline gain was driven entirely by refinancing. The Refinance Index climbed 3% week over week and stood 17% above the same period one year ago, a sign that rate-sensitive borrowers continue to act when any opportunity presents itself in a structurally elevated rate environment.
The refinance share of total applications increased to 41.5% from 40.3% the week prior.
Purchase demand moved in the opposite direction. The seasonally adjusted Purchase Index fell 1% from the prior week, while the unadjusted figure declined 12%, reflecting the holiday-shortened period.
On a year-over-year basis, purchase applications remained 3% above year-ago levels, a modest but meaningful sign that underlying demand has not collapsed.
"Mortgage rates changed little over the course of last week, despite the more hawkish tone from the FOMC at its June meeting," said Mike Fratantoni, MBA's senior vice president and chief economist, based in Washington, D.C.
"Purchase application volume edged slightly lower, while refinance activity posted modest gains. Despite the elevated mortgage rates and overall economic uncertainty, mortgage application volume is running 8% above year-ago levels."
Jumbo and ARM borrowers see modest rate relief
The rate picture delivered selective relief. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($832,750 or less) eased one basis point to 6.59%, while jumbo loans — those above the conforming ceiling — fell 10 basis points to 6.52%.
FHA-backed 30-year mortgages held flat at 6.25%, and the 15-year fixed rate was unchanged at 6.02%. The sharpest weekly improvement belonged to the 5/1 adjustable-rate mortgage (ARM), which dropped 18 basis points to 5.68%.
The ARM share of total applications edged down to 8.2%. Government loan demand showed a mixed picture: the FHA share rose to 17.9% from 17.5%, while the VA share contracted to 12.3% from 12.9%.
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