Drop In Mortgage Rates Spurs Application Activity

A sharp drop in mortgage rates reignited mortgage activity in the July 1 week, especially in refinancing, which surged 21 percent from the previous week to the highest level since January 2015. Purchase applications for home mortgages were subdued in comparison, rising 4 percent from the prior week to partially offset a three-week long decline, while ratcheting up the gain on the same week a year ago to an impressive 23 percent. The Mortgage Bankers Association noted that the large jump in refinancing was set off by falling interest rates as markets assessed the impact of Brexit and downgraded the likelihood of rate hikes by the Fed, pulling down mortgage rates to the lowest level in over three years. The average rate for 30-year fixed-rate mortgages on conforming loans ($417,000 or less) fell 9 basis points to 3.66 percent, the lowest level since May 2013.