The results of the Mortgage Bankers Association’s (MBA) last two Weekly Mortgage Application Surveys may be showing the ripple effect that Brexit is having on mortgage activity. The MBA’s survey for the week ending July 8, 2016 reflected a 7.2% increase in mortgage application activity over the previous week. For the week ending July 1, 2016, the MBA’s survey reported a 14.2% spike in mortgage application volume compared to the week before.
The Refinance Index also continued to show gains over the last two MBA surveys. In the survey for the week ending July 1, the Refinance Index grew by 21% over the previous week. Then, in the survey for the week ending July 8, the Refinance Index increased by another 11%. The refinance share of mortgage applications also grew from 61.6% in the week ending July 1 to 64.0% in the week ending July 8.
MBA Chief Economist Mike Frantantoni attributed the surge in mortgage activity to the decline in mortgage interest rates. In regards to the survey results for the week ending July 1, he stated, “Interest rates continued to drop last week as markets assessed the impact of Brexit, downgrading the likelihood of additional rate hikes by the Fed, and mortgage interest rates for 30-year conforming loans dropped to their lowest level in over 3 years.”
Mortgage interest rates also showed declines in the survey for the week ending July 8. The average contract interest rate for 30-year fixed-rate mortgages (FRM) for conforming loans declined from 3.66% the previous week to 3.60%. Fifteen-year FRMs also dipped below the previous week from 2.96% to 2.88%. Read the full article at http://bit.ly/29Ev3Mv.