The latest data from the Mortgage Bankers Association (MBA) recorded an uptick in mortgage application activity for the week ending July 7.
The Market Composite Index, a measure of mortgage loan application volume, was up by 0.9% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index was 19% below the level set in the previous week. The seasonally adjusted Purchase Index increased 2% from one week earlier, although the unadjusted index was down by 19% over the same period and was also 26% lower than the same week one year ago.
The Refinance Index dipped 1% from the previous week and plummeted 39% from the same week one year ago. The refinance share of mortgage activity decreased to 26.8% of total applications from 27.4% in the previous week.
Among the federal programs, the FHA share of total applications increased to 13.3% from 13.0% the week prior while the VA share of total applications increased to 12.6% from 11.7% and the USDA share of total applications remained unchanged at 0.4%.
“Incoming economic data continue to send mixed signals about the economy, with the overall impact leaving Treasury yields higher last week as markets expect that the Federal Reserve will need to hold rates higher for longer to slow inflation,” said Joel Kan, MBA’s vice president and deputy chief economist. “All mortgage rates in our survey followed suit, with the 30-year fixed rate increasing to 7.07%, the highest level since November 2022. The jumbo rate also increased to 7.04%, a record high for the jumbo series, which dates back to 2011.”
Separately, the MBA reported a scant 0.1% rise in its Mortgage Credit Availability Index (MCAI) for June, to a level of 96.6 – the index was benchmarked to 100 in March 2012.
Both the Conventional MCAI and the Government MCAI were unchanged while the component indices of the Conventional MCAI recorded mixed results – the Jumbo MCAI decreased by 0.2% as the Conforming MCAI increased by 0.2%.
“Mortgage credit availability was essentially unchanged in June, remaining close to the lowest level since early 2013, as the industry continues to operate at reduced capacity,” said Kan. “Lenders are streamlining their operations by offering fewer loan programs, with some exiting certain channels. Data from our Weekly Applications Survey indicated that June mortgage applications were more than 30% lower than a year ago and at the slowest pace since December 2022. The Jumbo Index declined slightly by 0.2% – the second straight monthly decrease – as liquidity conditions have been tightening for jumbo lending.”
