Mortgage applications increased 3.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending July 12, 2024.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 30 percent compared with the previous week. The Refinance Index increased 15 percent from the previous week and was 37 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index increased 22 percent compared with the previous week and was 14 percent lower than the same week one year ago.

“Mortgage rates declined last week, as recent signs of cooling inflation and the increased likelihood of Fed rate cuts later this year pulled them lower. The 30-year fixed rate declined to 6.87 percent, the lowest rate since March 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Application activity was up 4 percent, driven by a 15 percent jump in refinances to the highest level since August 2022. While FHA and VA refinance applications accounted for a significant share of the increase, these are likely recently originated loans with even higher than current offered rates. Even with last week’s rate decline, purchase applications continue to lag, down 14 percent compared to last year’s pace.”

The refinance share of mortgage activity increased to 38.8 percent of total applications from 34.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.8 percent of total applications.

The FHA share of total applications increased to 13.5 percent from 12.5 percent the week prior. The VA share of total applications increased to 15.2 percent from 13.7 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.87 percent from 7.00 percent, with points decreasing to 0.57 from 0.60 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) decreased to 7.07 percent from 7.13 percent, with points increasing to 0.57 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.75 percent from 6.87 percent, with points decreasing to 0.81 from 0.92 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.49 percent from 6.63 percent, with points decreasing to 0.50 from 0.61 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 6.33 percent from 6.22 percent, with points decreasing to 0.58 from 0.60 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.