Mortgage Applications Fall As Inventory Tightens

Mortgage applications for home purchases and refinances dipped slightly last week, according to a report released Wednesday by the Mortgage Bankers Association.

Total applications decreased 1.8 percent for the week ending June 26, the Weekly Mortgage Applications Survey found. The Refinance Index decreased 2 percent from the previous week, though remained 74 percent higher than a year ago. The Purchase Index dropped 2 percent for the week but was 15 percent higher than the same week a year ago.

“After two months of strong growth, purchase applications declined for the second week in a row,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The weakening in activity is potentially a signal that pent-up demand is starting to wane and that low housing supply is limiting prospective buyers’ options. The average purchase application loan size increased to a record high in our survey – more proof that tight inventory conditions are leading to faster price growth.”

A report released Wednesday by backed that up:

  • The number of homes listed for sale in the United States was down 27.4 percent year-over-year.
  • The number of new listings declined by 19.3 percent nationally.
  • Home prices show sustained growth, with the national median listing price up 5.1 percent to $342,000.

The MBA report found that the refinance share of mortgage activity decreased to 61.2 percent of total applications from 61.3 percent the previous week. The adjustable-rate mortgage share of activity increased to 3.2 percent of total applications.

The FHA share of total applications increased to 11.7 percent from 11.4 percent the week prior. The VA share of total applications decreased to 10.8 percent from 11.0 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.