Report: Mortgage applications tumbled 6.5% last week

June 8 (UPI) -- The homebuying market continued to cool, with mortgage applications last week falling to a seasonally adjusted 6.5% from the week before, according to the Mortgage Bankers Association's weekly application survey.

According to the report, on an unadjusted basis, applications tumbled 17% from the week before. The refinancing market continued to take a hit, dropping 6% last week from the week before and 75% from the same time last year.

The seasonally adjusted purchase index dropped 7% from one week earlier.

The decrease in applications comes as interest rates continued upward from 5.33% to 5.4% for 30-year fixed-rate mortgages with conforming loan balances of $647,200 or less.

"Weakness in both purchase and refinance applications pushed the market index down to its lowest level in 22 years," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "The 30-year fixed-rate increased to 5.4% after three consecutive declines.

"While rates were still lower than they were four weeks ago, they remain high enough to still suppress refinance activity. Only government refinances saw a slight increase last week. The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past months. These worsening affordability challenges have been particularly hard on prospective first-time buyers."

The refinance share of the mortgage application activity actually increased last week from 31.5% to 32.2% while the adjustable-rate mortgage share of activity decreased to 8.2% of total applications.