The Mortgage Bankers Association’s (MBA) latest Weekly Application shows an uptick in applications for the week ending July 3, 2020. The Market Composite Index increased by 2.2% from the previous week on a seasonally adjusted basis and its constituent Purchasing and Refinancing indices increased by 5.3% and 0.4%, respectively. The MBA’s 30-year fixed-rate mortgage rate fell to a new record low of 3.26%, sliding by 4 basis points from the previous week. Refinance applications increased slightly, of which the main contributor was the increase in conventional refinances. Overall refinance activity was up 111 percent from last year on an unadjusted basis.
As was the case in the survey last week, the combination of low housing supply and higher home prices led to another record high this week in the average purchase loan size of $365,700. With the waning of pent-up demand that happened last week owing partly to the resurgence of COVID-19 and continuing decline in mortgage contract rates, a rebound in purchasing is part of the general trajectory of growth in the past couple of months. Interestingly, this week’s purchasing level, on a seasonally adjusted basis, marks the highest level since January 2009.
The purchasing share of mortgage activity increased from the previous week by almost 0.1%. The Purchasing Index’s mild decline in the previous week reflects a relatively lower level with respect to 1990, as indicated in the above figure, but bounced back.