Refinancing wave is still not letting up
The strong demand from home buyers has led to an uptick in mortgage applications this week, according to the Mortgage Bankers Association.
MBA’s latest survey showed that mortgage loan application volume inched up 1.2% on a seasonally adjusted basis from the week before. Unadjusted, mortgage applications were up 1% week over week.
The share of homeowners looking to refinance their mortgages grew two percentage points to 63.3% of total applications as mortgage rates fell back from previous highs. Refinance applications also increased 4% week over week, while purchase applications dropped 4% to a three-month low.
“Mortgage rates increased last week, with all loan types hitting their highest levels in two weeks. Rates were still lower than levels reported in late March and early April, providing additional opportunity for borrowers to refinance,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Despite the 30-year fixed rate rising to 3.15%, applications for conventional and VA refinances increased. Ongoing volatility in refinance applications is likely if rates continue to oscillate around current levels.”
The adjustable-rate mortgage (ARM) share of mortgage activity was up to 3.9% of total applications. The FHA share declined to 9.2%, while the VA share rose to 12%, and the USDA share of total applications dipped to 0.4%.
“A decline in purchase applications was seen for both conventional and government loans. There continues to be strong demand for buying a home, but persistent supply shortages are constraining purchase activity, and building material shortages and higher costs are making it more difficult to increase supply. As a result, home prices and average purchase loan balances continue to rise, with the average purchase application reaching $411,400 – the highest since February.”