Mortgage application activity was on the decline last week, according to data from the Mortgage Bankers Association (MBA) for the week ending May 24.
The Market Composite Index was down by 3.3 percent on a seasonally adjusted basis from one week earlier and the unadjusted index fell by four percent. The seasonally adjusted Purchase Index decreased one percent from one week earlier and the unadjusted index was down three percent, although the latter was also seven percent higher than the same week one year ago. The Refinance Index decreased six percent from the previous week and the refinance share of mortgage activity decreased to 39.7 percent of total applications from 40.5 percent the previous week.
However, there was upward movement in the federal programs: The FHA share of total applications increased to 9.6 percent from 9.4 percent the week prior while the VA share of total applications increased to 11.2 percent from 11 percent and the USDA share of total applications inched up to 0.7 percent from 0.6 percent.
“Concerns over European economic growth and ongoing uncertainty about a trade war with China were some of the main factors that kept mortgage rates low last week. Even with lower rates on three of the five surveyed loan types, refinance activity fell six percent, essentially reversing an eight percent increase the week before,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Purchase applications decreased for the third straight week, but remained more than seven percent higher than a year ago. It is possible that the trade dispute is causing potential homeowners to hold off on buying, with the fear that further escalation–or the lack of resolution–may have adverse impacts on the economy and housing market.”