After four straight weeks of declines, mortgage application activity finally gained ground during the week ended May 3. The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage application volume, rose 2.7 percent on a seasonally adjusted basis from the previous week and was 3 percent higher before adjustment.
Purchase mortgage activity was 4 percent higher week-over-week on a seasonally adjusted basis, its first increase in three weeks. It rose 5 percent on an unadjusted basis from both the week ended April 26 and the corresponding week in 2018.
The Refinance Index was up 1 percent from the previous week, its first improvement since the week ended March 29. The share of applications that were for refinancing however declined to 37.9 percent from 38.8 percent the prior week.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
"We saw a good week for the spring homebuying season, as a 5 percent increase in purchase applications - both weekly and year-over-year - drove the results," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Average loan amounts also stayed elevated, with government purchase applications rising to the highest in the survey [$254,400.] Even with slower price appreciation in higher-priced markets, home prices are still rising enough to push average loan sizes higher."
The average loan price across all products was $329,500 for all mortgages, up from $324,300 the previous week. The average purchase mortgage balance was $335,600, $3,600 higher week-over-week.
Kan added, "With purchase activity increasing and mortgage rate movements mostly unchanged, the refinance share of applications were at their lowest level since last November."
The FHA share of total applications was unchanged from the previous week at 9.5 percent while the VA share increased to 11.1 percent from 10.9 percent. USDA applications accounted for 0.6 percent of the total volume as they have for many weeks.
Both contract and effective rates were mixed during the week. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with loan balances at or below the conforming limit of $484,350 decreased to 4.41 percent from 4.42 percent. Points increased to 0.47 from 0.46 and the effective rate was unchanged.
Thirty-year FRM with jumbo balances exceeding the conforming loan limit had an average rate of 4.27 percent compared to 4.31 percent the previous week. Points both weeks averaged 0.23 and the effective rate declined.
The rate for 30-year FRM backed by the FHA increased to 4.44 percent from 4.39 percent and points moved to 0.56 from 0.47. The effective rate also increased.
Fifteen-year FRM continued with the same 3.81 percent average week as during the prior week. Points increased to 0.42 from 0.40, but the effective rate did not change.
The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) increased to 3.88 percent from 3.81 percent, with points decreasing to 0.26 from 0.54. The effective rate decreased from last week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications from 6.2 percent the previous week.
MBA's Weekly Mortgage Applications Survey been conducted since 1990 and covers over 75 percent of all U.S. retail residential applications Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.