Mortgage activity plummeted last week thanks to the Federal Housing Administration’s changing refinance policy. According to weekly data from the Mortgage Bankers Association, mortgage applications fell 7.1 percent for the week ending June 22, largely due to an 8 percent drop in refinance activity. Applications for purchases fell by about 1 percent on an adjusted basis.
“Refinance volume fell last week due largely to a fall-off in refinance applications for government loans, which had more than doubled the prior week,” said Michael Fratantoni, MBA’s vice president of research and economics. “The large swings in activity were due to the implementation of FHA’s new premiums on streamline refinances, and borrowers timing their applications to lower their premiums.”
As a result, refinances fell to about 79 percent of total applications from more than 80 percent in the prior week.
Interest rates budged only slightly in the last week. For 30-year fixed-rate mortgages with conforming balances the average rate rose one basis point to 3.88 percent, while it rose six basis points for jumbo loans to 4.12 percent. The interest rate for FHA-backed 30-year fixed-rate loans fell to 3.71 percent from 3.72 percent. Finally, 15-year fixed-rate mortgage rates decreased by the same amount to 3.24 percent. — Adam Fusfeld