Home Loan Applications See 2.7% Drop
The MBA's weekly mortgage applications survey shows decline in last week's application volume
Low inventory and high mortgage rates have taken their toll on prospective homebuyers, if the latest drop in new mortgage applications is any indication.
The Mortgage Bankers Association’s (MBA) weekly mortgage applications survey showed a 2.7% decrease in mortgage applications during the week ending April 19. The Market Composite Index, a measure of loan application volume, decreased 2.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2% compared with the previous week.
The Refinance Index decreased 6% over the same period, but was 3% higher than the same week a year ago.
The seasonally adjusted Purchase Index decreased 1% week-over-week, and the unadjusted Purchase Index, which rose 0.2%, was 15% lower year-over-year.
“Mortgage rates continued to move higher last week, reaching their highest levels since late 2023 and putting a damper on applications activity,” said Joel Kan, vice president and deputy chief economist at the MBA. “The 30-year fixed rate increased for the third consecutive week to 7.24 percent, the highest since November 2023. Purchase applications declined, as home buyers delayed their purchase decisions due to strained affordability and low supply. The ARM share of applications increased to 7.6 percent, consistent with the upward trend in rates, as buyers look to reduce their potential monthly payments.”
The refinance share of mortgage activity decreased to 30.8% of total applications from 32.1% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.6% of total applications. The FHA share of total applications increased to 12.8% from 12.3% the week prior. The VA share of total applications decreased to 11.7% from 12.4% the week prior. The USDA share of total applications remained unchanged from 0.4% the week prior.
In the same time frame, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 7.24% from 7.13%, with points increasing to 0.66 from 0.65 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.