Refinance surge leads mortgage applications higher

Mortgage applications increased 5.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 10, 2020. Last week's results included an adjustment for the Fourth of July holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 5.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 16 percent compared with the previous week. The Refinance Index increased 12 percent from the previous week and was 107 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index increased 5 percent compared with the previous week and was 16 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 64.2 percent of total applications from 60.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3.0 percent of total applications.

The FHA share of total applications increased to 11.1 percent from 10.9 percent the week prior. The VA share of total applications increased to 11.0 percent from 10.4 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.19 percent from 3.26 percent, with points decreasing to 0.33 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.