After weeks of steady declines and levels well below originations the same time last year, mortgage applications jumped a surprising 10.3% from one week earlier, according to data for the week ending June 6 from the Mortgage Bankers Association.
The previous week’s results included an adjustment for the Memorial Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 10.3% on a seasonally adjusted basis from one week earlier.
The Refinance Index increased 11% from the previous week. The seasonally adjusted Purchase Index increased 9% from one week earlier. The unadjusted Purchase Index increased 19% compared with the previous week and was 13% lower than the same week one year ago.
“The jump in applications shows folks are taking notice of rates near six-month lows,” said Quicken Loans vice president Bill Banfield. “The jump in purchase applications is especially good to see, as homeowners may finally be getting comfortable putting their home on the market with the level of inventory they see around them.”
The refinance share of mortgage activity increased to 54% of total applications from 53% the previous week. The adjustable-rate mortgage share of activity remained unchanged at 8% of total applications.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.34% from 4.26%, with points increasing to 0.16 from 0.13 (including the origination fee) for 80% loan-to-value ratio loans. The effective rate increased from last week.