The latest Mortgage Bankers Association Weekly Mortgage Applications Survey revealed that applications increased 0.1%, on a seasonally adjusted basis for the week ending May 1, 2020. On an unadjusted basis the index showed a 1% increase compared to the previous week
The refinance share of mortgage activity decreased to 70% of total applications from 71.6% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3% of total applications.
"Mortgage application volume was unchanged last week, even as the 30-year fixed rate mortgage declined
to 3.40 percent—a new record in MBA's survey," said Mike Fratantoni, MBA's senior vice president and chief economist. "Despite lower rates, refinance applications dropped, as many lenders are offering higher rates for refinances than for purchase loans, and others are suspending the availability of cash-out refinance loans because of their inability to sell them to Fannie Mae and Freddie Mac."
The Federal Housing Administration's share of total applications decreased to 11.1% from 11.5% the week prior. The VA share of total applications remained unchanged from 13.3% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.
"Although purchase activity remains almost 19% below year-ago levels, this annualized deficit has decreased as more states reopen amidst the apparent, pent-up demand for homebuying," said Fratantoni.