As we near the end of May, more people are applying for mortgages week-by-week.
That’s according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, which showed a 1.9% increase in applications the week ending May 17 over the week prior.
This also marked a 1.9% increase in the MBA’s Market Composite Index, which measures application volume. On an unadjusted basis, the Index increased 1.1% compared with the previous week.
The share of people refinancing their mortgage increased 7% week over week and 21% year over year (YOY) in the same time frame. The seasonally adjusted Purchase Index decreased 1% from one week earlier, 2% on an unadjusted basis, and experienced an 11% decline YOY.
This increase in total applications could in part be due to the fact that the 30-year fixed mortgage rate declined for the third straight week, dropping to 7.01%. This marks the lowest rate in seven weeks.
“Rates coming down from recent highs spurred some borrowers to act, with increases across both conventional and government refinance applications,” MBA’s Vice President and Deputy Chief Economist Joel Kan commented. “VA refinances had a double-digit increase for the third consecutive week, although the current level of refinancing is still well below its historical average. Purchase activity continues to lag despite this recent decline in rates, down 11 percent from a year ago, as potential buyers still face limited for-sale inventory and high list prices.”
Overall, the refinance share of total mortgage application activity increased to 34% percent from 32% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.6% of total applications; the FHA share increased to 12.8% from 12.4%; the VA share increased to 13.7% from 12.7%, and the USDA share decreased to 0.3% from 0.4%.
