Mortgage application activity was down across the board during the week ended June 24.  The Mortgage Bankers Association (MBA) reports that its Market Composite Index, a measure of application volume, dropped by 2.6 percent on a seasonally adjusted basis from the week ended June 17.  On an unadjusted basis the loss was 3 percent.

The decline was shared about equally by refinancing and purchase applications.  The Refinance Index lost 2 percent from its level a week earlier.  The seasonally adjusted Purchase Index was down 3 percent and the unadjusted Purchase Index fell 4 percent.  Unadjusted purchase applications were 13 percent higher than during the same week in 2015.

"Keep in mind that MBA's numbers may come out on the Wednesday of any given week, but that they refer to Mon-Fri of the PREVIOUS week," notes Matt Graham, CEO of MBS Live.  "Last week's Brexit news didn't have a big impact on rates until Friday--not to mention the fact that the rest of the week saw rates move much higher versus the previous week.  The bottom line is that NEXT WEEK'S report is the logical place to look for the effects of the recent drop in rates."

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

Refinancing as a share of all mortgage activity increased for the fourth straight week, rising to 58.1 percent from 57.7 percent a week earlier.  The FHA share of applications dropped to 10.6 percent from 11.7 percent and the VA share gained 1.1 percentage point to 12.2 percent.  USDA mortgage applications ticked up to 0.7 percent of the total from 0.6 percent a week earlier.

Interest rates were mixed. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) dropped to its lowest level since May 2013, 3.75 percent, from 3.76 percent.  Points increased to 0.36 from 0.33 and the effective rate was unchanged

The contract rate for 30-year FRM with jumbo loan balances (greater than $417,000) had dropped to a five-year low a week earlier but it bounced back by 4 basis points to 3.74 percent.  Points increased to 0.34 from 0.28 and the effective rate was up.

Thirty-year FRM had a contract rate that was unchanged at 3.61 percent.  Points increased to 0.37 from 0.24, pulling the effective rate higher

The average contract interest rate for 15-year FRM dipped to 3.02 percent from 3.04 percent. Points rose to 0.38 from 0.36 and the effective rate decreased.

The adjustable-rate mortgage (ARM) share of activity increased to 5.9 percent of total applications from 5.7 percent a week earlier. The average contract interest rate for 5/1 ARMs decreased to 2.88 percent from 2.92 percent while points rose to 0.30 from 0.21, leaving the effective rate unchanged.

MBA's indices are derived from a Weekly Mortgage Application Survey which covers over 75 percent of all U.S. retail residential mortgage applications.  The survey, which has been conducted since 1990 polls respondents that include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.