Purchase mortgage applications increased for the third consecutive week, reaching the highest level of activity since early May, in spite of the 30-year fixed rate increasing slightly to 6.75%.
For the week that ended June 23, mortgage applications climbed 3% from the prior week, according to data from the Mortgage Bankers Association.
“Purchase applications increased for the third consecutive week to the highest level of activity since early May but remained more than 20% lower than year ago levels,” said Joel Kan, MBA’s vice president and deputy chief economist.
New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home sales market, which has historically low levels of inventory. Many potential sellers keep on holding on to their lower-rate mortgages, according to economists.
Last week, mortgage rate changes varied across loan types, with the 30-year fixed rate increasing slightly to 6.75% from 6.73%. On the other hand, the jumbo rate was higher than the conforming rate for the third week in a row. The spread between the rates of the two types of loans widened to 16 basis points. As a point of comparison, from May 2022 to May 2023, the jumbo rate averaged around 30 basis points lower than the conforming rate. The MBA data showed that for jumbo loan balances (greater than $726,200), the rate jumped to 6.91% from 6.80% last week.
At Mortgage News Daily, mortgage rates were higher on Wednesday morning, at 6.92%.
Refinancing applications increased 3% last week compared to the previous week and were 32% lower than the same week one year ago. However, the refinance share of mortgage activity increased to 27.2% of total applications from 26.9% the prior week. Meanwhile, the purchase index increased by 3% from one week earlier and was 21% lower than last year’s level on an unadjusted seasonal basis.
Regarding loan types, the adjustable-rate mortgage (ARM) share of mortgage apps decreased to 6.1% of total applications, the MBA data shows.
The Federal Housing Administration loans’ share decreased to 12.9% from 13.3% the week prior. The U.S. Department of Veteran Affairs loans’ share increased to 12.2% from 11.9% the week prior. And the U.S. Department of Agriculture loans’ share remained unchanged at 0.4% of the total applications.
