Mortgage Apps: Purchases Fall Towards Record Lows

Bottom Line:  Mortgage applications fell further in the first few days of June as purchase applications dropped with mortgage rates holding above 4.5% on 5/1 ARMS (a 30-year amortizing mortgage with a 5-year fixed-rate and an adjustable rate thereafter) and over 5.5% on 30-year fixed-rate mortgages. With last week's declines, the purchase index is nearly at the lows of the pandemic and back near 2016 levels. After months of higher than expected activity purchase activity has clearly collapsed in the last few weeks, nearing record lows like refinancing activity.The MBA Mortgage Application Index FELL -6.5% to 288.0, BELOW the 13-week average of 371.0 and -55.3% BELOW the year-ago level. Non-seasonally adjusted the index FELL sharply, DOWN -16.9%.
 
The Purchase Index FELL sharply, DOWN -7.1% to 208.0, BELOW the 13-week average of 246.0 and -20.6% BELOW the year-ago level.
 
The Refinancing Index FELL -5.6% to 710.0, BELOW the 13-week average of 1058.0 and -75.3% BELOW the year-ago level.The effective (adjusted for points paid) 30-year mortgage rate ROSE 9bps to 5.57%, ABOVE the 13-week average of 5.31% and 72bps ABOVE the year-ago level.Current coupon yields in the secondary market were up 21.0 bps last week , closing at 4.08%, and were up 6.0 bps this week through Tuesday.