St Casimirs Mortgage Minute

Before Brexit Storm, Mortgage Applications Fell 2.6 Percent

The Mortgage Bankers Association (MBA) reported on June 29 that total mortgage application volume fell 2.6 percent from the previous week. However, applications are up almost 38 percent on a year-over-year basis, mainly driven by refinance applications, which dropped 2 percent last week but surged 63 percent compared with the same week a year ago. Meanwhile, purchase applications were down 3 percent for the week but edged up 13 percent from a year ago. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances declined from 3.76 percent to 3.75 percent, marking the lowest level since May 2013. "The Brexit vote led to a large drop in Treasury rates, about 20 basis points initially and an additional 10 basis points on Monday, before stabilizing somewhat on Tuesday," said MBA chief economist Michael Fratantoni. "Whether the impact of Brexit will be contained to the initial shock of the 'Vote Leave' victory or will have a longer-term impact on markets is unclear ... MBA's best guess at this point is that the impact on the mortgage market will be to keep mortgage rates lower for longer, leading to another pickup in refinance activity in the near future."

From "Before Brexit Storm, Mortgage Applications Fell 2.6 Percent"
CNBC (06/29/16) Olick, Diana