Mortgage Apps: Refis Continue To Move Higher Amid Lower Rates

Bottom Line: With 30-year fixed-rate mortgages moving down to nearly 4%, refinancing activity continued to move higher last week with the index hitting its highest level since the first week of November, 2016. The refinancing index is now up over 90% from its year ago level when mortgage rates were averaging nearly 4 7/8%. 4 1/4% appears to have been an important "elbow" in terms of the refinancing incentive function with a sharp increase in refinancing as rates fell below that level and a sharp decline when they went above that level. Finally, purchase activity, which had been nearly the sole focus as refinancing was all but dead, fell slightly in the last two weeks but continues to trend higher overall, suggesting housing activity is likely trying to find a bottom after 2018's retrenchment. The MBA Mortgage Applications Index ROSE by 1.3% during the week ended June 21 to 518.7, sharply above its 13 week average of 455.4 and 42.0% ABOVE its year ago level. The Purchase Index FELL by 0.9% to 266.3, slightly below its 13 week average of 268.6 but 9.0% ABOVE its year ago level. The Refinance Index ROSE by 3.2% to 1,950. With this increase, refinancing activity is sharply above its 13 week average of 1,503 and 91.9% ABOVE its year ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 8 bps to 4.06% and with the 15-year fixed rate declining by 10 bps to 3.40%.