• Purchase applications continue to rise.

• Refinancings ease.

The Mortgage Bankers Association reported that its Mortgage Loan Application Index rose 2.7% (75.1% y/y) last week and reversed the prior week's decline.

Purchase applications increased for the sixth straight week. The 8.6% gain (8.7% y/y) occurred as the economy began to open up after coronavirus shutdowns. Applications to refinance an existing mortgage eased slightly but still were up 176.1% from a year earlier.

The refinancing share of mortgage activity fell to 62.6% of total applications, down from 76.2% early last month. Just 3.4% of total loan volume were adjustable-rate mortgages.

The effective interest rate on a 15-year fixed-rate mortgage was fairly steady at 2.94% last week. This rate remained close to its all time low (dating back to 1990). The effective interest rate on a 30-year fixed-rate mortgage rose two basis points to 3.52% but remained down from a high of 3.93% in mid-March. The effective rate on a 30-year Jumbo mortgage also rose slightly to 3.79%. The rate on the 5-year adjustable rate mortgage fell to 3.09% from a high of 4.61% in October 2018.

The average mortgage loan size increased to $314,900 and reversed most of the declines during the prior two weeks. The average loan size for purchases jumped w/w to $340,200, the highest level in two months. The average loan size of refinancings was little changed w/w at $299,800 but compared to an early-March high of $372,100.

Home buyers and owners continue to lock in currently low levels of interest rates. Applications for fixed-rate loans increased 87.5% y/y, while applications for adjustable rate loans fell 5.0% y/y.

The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for each index is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's SURVEYW database.

The Fed's latest Beige Book covering regional economic conditions can be found here.