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The MBA's Market Composite Index, a measure of weekly application activity based on surveys of the trade group's members, leaped a seasonally adjusted 15.6% for the seven-day period ending June 7. In the prior holiday-shortened week, the index had dropped 5.2%. Despite the latest upturn, last week's surge only left volumes flat compared to the same survey period of 2023.
The 30-year fixed-rate conforming average decreased by 5 basis points for the week, declining to 7.02% from 7.07%. Points used to help buy down the rate were unchanged at 0.65 for 80% loan-to-value ratio mortgages. Loans with conforming limits of $766,550 in most markets make them eligible for sale to the government-sponsored enterprises.
"Mortgage rates were trending lower over the course of last week until a stronger than anticipated employment report resulted in a bounce back," said Mike Fratantoni, MBA senior vice president and chief economist, in a press release.
Still, activity increased across both conventional and federally backed lending, with a surge in the latter helping propel overall volumes. The seasonally adjusted Government Index accelerated 27.1% from the previous survey, buoyed by applications
"Lower rates earlier in the week meant a strong increase in refinance activity, particularly for VA borrowers, who jumped on the chance to lower their rates," Fratantoni said.
The Refinance Index rose 28.4% from seven days earlier, with VA volumes up 142.7%. Year over year, the index was up a similar 28.8%. Elevated refinance activity garnered a 35.2% share relative to total weekly volume, increasing from 31.1%.
At the same time, the Purchase Index also climbed up a seasonally adjusted 8.6% from a week earlier. But compared to the same survey period a year ago, volumes dropped 11.9%.
"Multiple data sources are now indicating that home inventory levels, while still historically low, are up significantly from last year at this time. This is good news for many prospective homebuyers who have been frustrated by the lack of homes on the market," Fratantoni said.
Thanks to renewed interest coming from VA borrowers, government-sponsored applications ended up expanding its portion of weekly volume. VA-guaranteed mortgages grew to 14.7% from 12.1%, more than offsetting the decline in Federal Housing Administration-backed loans, which narrowed to 13.1% from 13.2%. Applications coming from U.S. Department of Agriculture programs grew to a 0.4% share from 0.3% week over week.
Other fixed mortgage rates among MBA lenders either flattened or decreased alongside the conforming average. The 30-year jumbo rate for loans with balances exceeding the conforming limit inched down to an average of 7.18% from 7.21%. Borrowers typically applied 0.54 worth of points compared to 0.41 a week earlier.
At the same time, the average rate of the 30-year FHA-backed loan remained at 6.87%. But points to buy down the rate decreased to 0.92 from 0.96 for 80% LTV-ratio loans.
The 15-year fixed-rate average took a larger fall of 15 basis points to 6.6% from 6.75%. Points decreased to 0.55 from 0.63.
Heading the opposite direction, the mean 5/1 adjustable-mortgage rate average finished 7 basis points higher from the previous week, rising to 6.45% from 6.37%. Points used on the loans, which start with a fixed 5-year term, jumped to 0.81 from 0.63.
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