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There were fewer applications for mortgages and even less refinancing activity last week, according to the latest Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey.
The Market Composite Index dropped 4.8 percent on a seasonally adjusted basis from one week earlier, although it increased seven percent on an unadjusted basis. The seasonally adjusted Purchase Index decreased one percent from one week earlier, but the unadjusted Purchase Index increased 14 percent and registered a 27 percent year-over-year spike.
But the harshest fall occurred with the Refinance Index, falling seven percent from the previous week. The refinance share of mortgage activity decreased to its lowest level since January 2016, with 58.6 percent of total applications; a week earlier, it was at 61 percent.
As for the government loan programs, the FHA and USDA shares of total applications remained unchanged at 12 percent and 0.7 percent, respectively, while the VA share of total applications fell from 13 percent to 12.1 percent.
While the latest housing data is disappointing, mortgage professionals are not discouraged about the market’s viability. A new survey of 200 mortgage lending professionals by the St. Louis-based Lenders One Mortgage Cooperative found 62 percent of respondents expected home loan purchase production to increase this year, with an overall average anticipated increase of 11 percent. Furthermore, 87 percent of respondents predicted the mortgage purchase market will be “somewhat to extremely active,” due in large part to marketing strategies for reaching new demographics—particularly Millennials and Hispanics—as well as introducing new products and expanding their sales staff and regional presence.
"The strong confidence levels we're seeing among lenders highlight the continued bounce back from one of the most challenging real estate and lending environments in U.S. history," said Daniel T. Goldman, interim CEO at Lenders One. "In an environment where lenders can once again focus on business growth initiatives, it will be more important than ever for mortgage professionals to have access to the tools and ongoing training they need to capitalize on these emerging trends."