Homeowners looking to refinance their mortgages drove up the volume of applications last week as homebuyers retreated.
An index tracking the number of applications to refinance increased 6 percent, seasonally adjusted, last week, compared to the prior week, according to the Mortgage Bankers Association’s survey.
The MBA metric, known as the refinance index, was up 88 percent year-over-year.
Meanwhile, the volume of homebuyers applying for purchase loans fell by 1 percent, compared to the week before when the purchase index was flat. The index had decreased each week for the prior month.
Despite the slowdown, Joel Kan, MBA’s head of industry forecasting, said that homebuyer activity remains strong. He said the purchase index was still up 25 percent year-over-year last week and noted that the index had posted annual gains for the past six months straight.
There was some movement in rates, particularly for large loans, according to MBA. The average 30-year, fixed-rate mortgage rate ticked up 1 basis point to 3.01 percent from 3 percent the week before. Jumbo rates dropped 10 basis points to 3.18 percent from 3.28 percent, however.
Despite low rates, however, buyers in New York City are reporting increasing scrutiny from lenders. Nationally borrowers with lower credit are increasingly finding themselves locked out of the market.
Refinancing activity accounted for nearly 69 percent of the home loans surveyed last week, which drove up MBA’s index tracking all home loans by 3.8 percent, seasonally adjusted.
MBA’s survey has been running weekly since 1990 and tracks 75 percent of the residential mortgage market.