Mortgage activity slipped in the latest reported period, as noted yesterday by the Mortgage Bankers Association.
The Mortgage Bankers Association (MBA) Wednesday reported on mortgage activity for the period ending June 17. The MBA’s Market Composite Index of overall mortgage activity fell 5.9%, mostly due to a drop in refinancing activity and an increase in mortgage rates.
The seasonally adjusted Purchase Index, which measures mortgage applications filed for home purchases (new or existing), fell 2.8% against the week just prior. The MBA’s Refinance Index took a much harder landing route, dropping 7.2% against the week earlier.
The reason for the decline is clear, as contracted rates on 30-year and 15-year fixed rate mortgages rose to 4.57% (from 4.51%) and 3.7% (from 3.67%), respectively. It’s not much of a change, yet any change in rates affects the economic feasibility of a vast number of potential refinancing opportunities. The share of refinancing deals declined as a percentage of the whole in this latest period, to 69.2%, from 70%.
The four-week moving average of the Market Composite Index still shows an increase of 0.4%, with the Purchase Index down 0.7% and recent refinancing activity moving that index up 0.8%.We cannot read too much into the week’s activity though, as the direction of rates are at the whim of Federal Reserve decision-making, with important information reaching the wire minute-to-minute now.