After rising 10.3% the week prior, mortgage application volume took a dive during the week ending June 13 – dropping 9.2% and essentially erasing the previous week's gains, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, volume decreased 10% compared with the previous week.
Refinances were down 13% while applications for purchases fell 5%.
On an unadjusted basis, purchase application volume was down 6%. What's more, purchase application volume was 15% lower than the same week one year ago. Historically, May and June have been peak months for application volume.
As a result of the major drop in refinance application volume, the refinance share of mortgage activity decreased to 52% of total applications from 54% the previous week.
Mike Fratantoni, chief economist for the MBA, points out that mortgage interest rates crept back up last week, which likely accounts for the large drop in refinances.
"Although the average rate for the week was up only a few basis points, the increase was matched by a large drop in refinance volume, and purchase application volume also declined,’ he says.
Fratantoni adds that ‘some lenders continue to report that they have pre-approved borrowers who have been unable to find a property, given the tight inventory in certain markets."
The average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 4.36%, up from 4.34% the previous week.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 4.32%, up from 4.27% the week prior.
The average rate for a 30-year FRM backed by the Federal Housing Administration was 4.07%, up slightly from 4.06% the previous week.
The average rate for a 15-year FRM was 3.50%, up from 3.43% the week prior.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.20%, up from 3.18% the previous week.
The ARM share of activity remained unchanged at 8% of total applications.