The week ended May 29 was another of those holiday shortened weeks when the most relevant comment that can be made about mortgage application numbers is probably 'Never mind!"  The Mortgage Bankers Association said that mortgage applications, as measured by its Market Composite Index, dropped by 17 percent from the previous week on a non-seasonally adjusted basis and were 7.6 percent lower when seasonally adjusted.  The week's results include an adjustment to account for the Memorial Day holiday.
The Refinance Index decreased 12 percent from the previous week and the refinance share of all applications fell back to 49 percent from 51 percent, the lowest share since May 2014. . The seasonally adjusted Purchase Index decreased 3 percent from the week ended May 22. The unadjusted Purchase Index decreased 14 percent compared with the previous week and was 14 percent higher than the same week one year ago.

Refinance Index vs 30 Yr Fixed

Purchase Index vs 30 Yr Fixed

The FHA share of total applications rose to 14.9 percent from 14.5 percent the previous week and the VA share increased to 12.0 percent from 11.7 percent. The USDA share of total applications increased from 0.8 percent to 1.0 percent.

The drop in mortgage applications came despite lower contract and effective interest rates for each of the product types tracked by MBA.  The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) decreased to 4.02 percent from 4.07 percent, with points decreasing to 0.33 from 0.35.  The rate for 30-year FRM with jumbo loan balances (greater than $417,000) decreased to 4.01 percent from 4.06 percent, with points increasing to 0.30 from 0.29.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.77 percent from 3.83 percent.  Points increased to 0.21 from 0.16.

Fifteen-year FRM had an average rate of 3.27 percent, down 2 basis points from the previous week.  Points increased to 0.33 from 0.24.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 2.97 percent from 3.04 percent, with points increasing to 0.50 from 0.48,  The ARM share of activity fell to 6.1 percent of total applications from 6.4 percent the prior week.

MBA's Weekly Mortgage Applications Survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and rate information presumes a mortgages with an 80 percent loan-to-value ratio.  Points include the origination fee.