Prospective borrowers took a break for the holiday weekend, and mortgage applications shifted downward as a result.
Data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey indicated that mortgage applications decreased 5.7% the week ending May 24 from the prior week.
“Mortgage rates increased for the first time in four weeks, with the 30-year fixed rate up to 7.05% and all other loan types also seeing increases. The uptick in rates led to a decline in mortgage applications heading into Memorial Day weekend,” said MBA’s Vice President and Deputy Chief Economist Joel Kan. “Both purchase and refinance applications fell, pushing overall activity to the lowest level since early March. Borrowers remain sensitive to small increases in rates, impacting the refinance market and keeping purchase applications below last year’s levels."
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.7% on a seasonally adjusted basis from one week earlier and decreased 6.3% on an unadjusted basis.
In terms of specific types of mortgages people applied for in that time frame, the MBA’s Refinance Index decreased 14% but was 12% higher than the same week one year ago.
The Purchase Index decreased 1% and 3% on a seasonally adjusted and unadjusted basis, respectively, and was 10% lower than the same week one year ago.
The refinance share of mortgage activity decreased to 31.3% of total applications from 34% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.4% of total applications. The FHA share of total applications decreased to 12.7% from 12.8%; the VA share shifted down to 12% from 13.7% and the USDA share increased by 0.4% from 0.3%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 7.05% from 7.01%, with points increasing to 0.63 from 0.60 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) increased to 7.22% from 7.18%, with points decreasing to 0.43 from 0.44 (including the origination fee) for 80% LTV loans.
