Wednesday, June 22, 2016

MBA: Mortgage "Rates Drop, Refi Apps Jump in Latest Weekly Survey"

by Bill McBride on 6/22/2016 07:00:00 AM

From the MBA: Rates Drop, Refi Apps Jump in Latest MBA Weekly Survey

Mortgage applications increased 2.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 17, 2016.
...
The Refinance Index increased 7 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 12 percent higher than the same week one year ago.
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since May 2013, 3.76 percent, from 3.79 percent, with points increasing to 0.33 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Mortgage Refinance Index Click on graph for larger image.


The first graph shows the refinance index since 1990.

Refinance activity has increased a little this year since rates have declined.

30-year fixed rates would probably have to fall below 3.35% (the previous low) before there is a large increase in refinance activity.

Mortgage Purchase Index The second graph shows the MBA mortgage purchase index.

The purchase index is "12 percent higher than the same week one year ago".