Purchase applications see slight uptick due to FHA demand
The index decreased 2.0% on a seasonally adjusted basis from one week earlier, and on an unadjusted basis, the index decreased 2% compared with the previous week.
The refinance index decreased 5% from the previous week but was still 63% higher than the same week one year ago. The refinance share of mortgage activity decreased to 40.4% of total applications from 42.0% last week.
The seasonally adjusted purchase index saw an increase of 1% from one week earlier. The unadjusted purchase index increased 1% compared with the previous week and was 7% higher than the same week one year ago.
“Purchase applications saw the strongest weekly pace in almost two months and were 7% higher than a year ago. Last week’s purchase activity was driven primarily by a 6% increase in FHA applications, as the combination of loosening housing inventory and slowly declining mortgage rates have presented this segment of buyers with more opportunities,” said Joel Kan, MBA’s vice president and deputy chief economist.
“Additionally, VA purchase applications saw a modest increase over the week. Overall applications declined, however, as refinance applications were down 5% to its lowest level in a month.”
Added Kan, “Markets remained focused on potential trade policy changes, while the Fed held the funds rate [at] its current level, resulting in the 30-year fixed rate averaging 6.71% last week.”
The adjustable-rate mortgage (ARM) share of activity decreased to 6.3% of total applications, while the FHA share of total applications remained unchanged at 16.5% from the week prior. The VA share of total applications decreased to 14.5% from 14.6% the week prior. The USDA share of total applications increased to 0.6% from 0.4% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances decreased to 6.77% from 6.78%.
Both the average contract interest rates for 30-year fixed-rate mortgages backed by the FHA and 15-year fixed-rate mortgages remained unchanged at 6.40% and 6.08%, respectively.
The average contract interest rate for 5/1 ARMs saw a slight increase to 5.89% from last week’s 5.84%.
