If purchase activity is making up close to half of all mortgage activity, things can’t be good.
Mortgage rates surged for the second straight week, pushing the refinance share of mortgage applications closer to fifty percent, according to the MBA.
Mortgage application volume slipped 7.2 percent on a seasonally adjusted basis for the week ending June 5, and was up just 7.6 percent compared to the same week last year.
The refinance index decreased 11.8 percent from the previous week, while purchase activity inched up 1.1 percent.
The refinance share of mortgage activity has fallen to just 59.4 percent of total applications from 62.4 percent a week earlier; the refinance share was as high as 80 percent a couple of months ago.
The high interest rates are to blame, with the average 30-year fixed pricing at 5.57 percent, up from 5.25 percent a week earlier; the 15-year fixed also jumped, rising to 5.10 percent from 4.80 percent.
The one-year adjustable-rate mortgage climbed to 6.75 percent from 6.61 percent, but amazingly the ARM-share of total applications continues to move higher, increasing to 3.4 percent from 3.0 percent a week earlier.
The MBA’s weekly survey covers roughly half of all retail residential loan applications, but does not factor out declined or multiple apps.
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