Mortgage applications fell 1.5% from the previous week, as rising interest rates ended a brief pickup in activity, the Mortgage Bankers Association reported.
The MBA’s Weekly Mortgage Applications Survey for the week ending June 8 found that the refinance index decreased 2% from the previous week. Last week’s results included an adjustment for the Memorial Day holiday. The refinance share of application activity remained unchanged from the previous week at 35.6%.
Last week was the first time in the previous nine where application volume rose, led by a drop in the 10-year Treasury yield that was caused by political uncertainty in Europe. With the situation resolved, those yields — which serve as a benchmark for the 30-year fixed-rate mortgage — returned to levels just shy of the 3% mark.
“Despite lingering uncertainty over a potential trade war, investors moved away from Treasuries, pushing yields up for the week,” Joel Kan, the MBA’s associate vice president of industry surveys and forecasting, said in a press release. “Overall mortgage application activity declined as rates rose, but government applications increased, driven largely by increases in FHA applications, reflecting stronger demand by first-time homebuyers.”
The seasonally adjusted purchase index decreased 2% from one week earlier, while the unadjusted purchase index increased 9% compared with the previous week and was 0.2% lower than the same week one year ago.
Adjustable-rate loan activity decreased to 6.8% from 7.1% of total applications, while the share of Federal Housing Administration-guaranteed loans increased to 10.6% from 9.7% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 10.7% from 10.1% and the U.S. Department of Agriculture/Rural Development share remained unchanged at 0.8% from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased 8 basis points to 4.83%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased 4 basis points to 4.74%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 6 basis points to 4.83%. For 15-year fixed-rate mortgages the average rate increased 2 basis points to 4.23%.
The average contract interest rate for 5/1 ARMs increased 3 basis points to 4.11%.