A Dismal Week for Mortgage Applications

For the second week in a row, mortgage application volume took a dive. The latest data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey covering the week ending April 29 found the Market Composite Index down by 3.4 percent on a seasonally adjusted basis and down three percent on an unadjusted basis.

The seasonally adjusted Purchase Index decreased by 0.1 percent from one week earlier, but the unadjusted index increased by one percent compared to the previous week and was 13 percent higher than the same week one year ago. The Refinance Index fell by six percent from the previous week, while the refinance share of mortgage activity decreased to 52.9 percent of total applications from 54.4 percent the previous week.

The seasonally adjusted Purchase Index decreased by 0.1 percent from one week earlier. The unadjusted Purchase Index increased by one percent compared to the previous week and was 13 percent higher than the same week one year ago.

Among the government loan programs, the FHA share of total applications increased to 13.5 percent from 12.3 percent the week prior, while the VA share of total applications decreased to 11.5 percent from 12.2 percent and the USDA share of total applications decreased to 0.7 percent from 0.8 percent.

"Rates were running closer to one-month highs in the first half of last week and even as rates fell following the Federal Open Market Committee statement release midweek, mortgage rates ended the week higher compared to the previous week," said MBA Chief Economist Mike Fratantoni. "No one had anticipated that the Fed would raise rates at last week's meeting. But, MBA and others had expected somewhat more of a signal that they would be increasing rates again in June. Odds of a June have decreased a bit, but we expect that is still the most likely outcome."