That annual gain is being driven mostly by applications to refinance home loans, which fell 2 percent last week, but are 63 percent higher than the same week one year ago. Mortgage applications to purchase a home fell 3 percent for the week and are 13 percent higher than a year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) fell to its lowest level since May 2013, 3.75 percent, from 3.76 percent, with points increasing to 0.36 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. After the Brexit vote, rates plummeted, as investors sold off stocks and headed to the relative safety of the bond market.
"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 Michael Fratantoni, chief economist for the MBA.
"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, as even the terms and conditions of the United Kingdom's withdrawal from the EU remain to be seen," he added. "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."