The Mortgage Bankers Association (MBA) said this morning that its Market Composite Index, a measure of loan application volume, rose 1.7 percent on a seasonally adjusted basis and 2.0 percent unadjusted during the week ended May 4.  Applications for conventional mortgages rose compared to the week ended April 27 while the government component was down.

The Refinance Index rose 1.3 percent from the previous week, driven by a 1.8 percent increase in conventional applications while the Government Refinance Index decreased 2.3 percent.  Refinancing accounted for 72.1 percent of all applications compared to 72.6 percent the previous week. 

The seasonally adjusted Purchase Index increased 3.4 percent, spurred by a 5.4 percent increase in its conventional component while the government component was down.  The government share of purchase activity declined to 35.8 percent of all purchase applications from 37.0 percent the week before, the lowest share since March 27, 2009.  The unadjusted Purchase Index was up 3.8 percent week-over-week but was 0.4 percent lower than during the same week in 2011.   

The four-week moving average for the seasonally adjusted Market Index was up 1.13 percent and up 1.81 percent for the Refinance Index while the seasonally adjusted Purchase Index decreased 0.82 percent.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

The rate for FHA-backed mortgages increased for the week while all other rates declined.  The FHA rate for 30-year fixed-rate mortgages (FRM) increased to 3.81 percent from 3.80 percent with points decreasing to 0.45 from 0.50. 

The average contract interest rate for 30-year FRM with conforming balances ($417,500 or less) decreased four basis points to 4.01 percent with points down to 0.41 from 0.44.  This is the lowest rate for 30-year FRM in the history of the MBA survey.  The rate for jumbo 30-year FRM (with loan balances greater than $417,500) dropped from 4.32 percent with 0.38 point to 4.29 percent with 0.36 point.

The rate for 15-year FRM also set a new historic low.  It was down to 3.29 percent from 3.31 percent with points decreasing from 0.38 to 0.36 point.  The average contract interest rate for 5/1 ARMs decreased to 2.83 percent from 2.87 percent, with points increasing to 0.36 from 0.35.

The effective rate of all loans, including FHA loans decreased during the week.

All rate quotes are for 80 percent loan-to-value ratio loans and points include the application fee. 

MBA's information is compiled from its Weekly Mortgage Application Survey which covers over 75 percent of all U.S. retail residential mortgage applications.  The survey has been conducted weekly since 1990 with respondents including mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.