Ebbing Refinance Demand Weighs on Mortgage Applications

Mortgage applications declined overall for the<bfifth straight week even though there was a slight uptick in applications forrnpurchase mortgages.  The Mortgage BankersrnAssociation (MBA) said that its Market Composite Index, a measure of mortgagernapplication volume, declined by 1.6 percent on a seasonally adjusted basisrnduring the week ended May 22.  On anrnunadjusted basis the volume was down 2 percent compared to the week ended Mayrn15.rn</p

The Refinance Index fell 4 percent from thernprevious week and the share of applications that were for refinancing droppedrnfor the sixth consecutive week to 51 percent, one percentage point below thernrefinancing share a week earlier. </p

Applications for home purchases rose 1 percentrnon a seasonally adjusted basis but were unchanged from the previous week on an unadjustedrnbasis.  The unadjusted Purchase Index wasrn14 percent higher than during the same week in 2014.</p

Refinance Index vs 30 Yr Fixed</p

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Purchase Index vs 30 Yr Fixed</p

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Mortgage rates increased across the board onrnboth a contract and effective basis.  Thernaverage contract rate for a 30-year fixed rate mortgage (FRM) with conformingrnbalances of $417,000 or less increased from 4.04 percent to 4.07 percent.  Points increased from 0.32 to 0.35. </p

The jumbo 30-year FRM, those with balancesrnabove $417,000, had an average rate of 4.06 percent, up 2 basis points from thernprevious week.  Points increased fromrn0.25 to 0.29. </p

The averagerncontract interest rate for 30-year FRM backed by the FHA increased to 3.83 percent from 3.80 percent. rnPoints increased to 0.16 from 0.06.</p

Fifteen-year</bFRM had a rate that averaged 3.29 percent, an increase of 3 basis points fromrnthe previous week.  Points were down fromrn0.30 to 0.24.  </p