Despite mortgage interest rates that continued to decline, in the case of FHA loans retreating to levels last seen in 2013, mortgage activity decreased during the week ended June 10.  The Mortgage Bankers Association reported today that its Market Composite Index, a measure of application volume, dipped 2.4 percent on a seasonally adjusted basis compared to the week ended June 3.  On an unadjusted basis the index rose 21 percent from the previous week.  The June 3 results included an adjustment to account for the Memorial Day holiday.

The Refinance Index was down 1 percent from the previous week but the refinancing share of overall activity rose to 55.3 percent from 53.8 percent. The seasonally adjusted Purchase Index was 5 percent lower than one week earlier while the unadjusted index was 17 percent higher.  The latter was 16 percent above the level during the same week in 2015.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

The FHA share of total applications decreased to 11.8 percent from 13.0 percent and the VA share was 11.1 percent compared to 11.5 percent the week before.  The USDA share of total applications decreased to 0.6 percent from 0.7 percent.

Mortgage interest rates, both contract and effective, were down across the board.  The contract rate for conforming 30-year fixed-rate mortgages (FRM), those with mortgage balances of $417,000 or less, fell to 3.79 percent from 3.83 percent. It was the lowest contract rate since January 2015.  Points decreased to 0.32 from 0.33.

Jumbo 30-year FRM with balances greater than $417,000 dropped back to last month's levels with a contract rate of 3.75 percent with 0.26 point.  The previous week the rate was 3.81 percent with 0.25 point.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased ten basis points to 3.61 percent, the lowest rate since May 2013.  Points increased to 0.27 from 0.23.

Fifteen-year FRM were dipped back to May 2015 levels at 3.06 percent with 0.34 point.  A week earlier the contract rate was 3.11 percent with 0.35 point.

Applications for adjustable-rate mortgages (ARMs) increased from a 5.0 percent share during the first week in June to a 5.3 percent share.  The average interest rate for 5/1 ARMs decreased to its lowest level since May 2015, 2.87 percent, from 2.96 percent, with points decreasing to 0.26 from 0.29.

MBA's Weekly Mortgage Application Survey covers over 75 percent of all U.S. retail residential mortgage applications.  The survey, which has been conducted since 1990, reaches mortgage bankers, commercial banks, and thrifts.  The base period and value for all indexes is March 16, 1990=100 and interest rate data is for mortgages with an 80 percent loan-to-value ratio and points that include the origination fee.