Mortgage Applications Continue Losing Streak

Mortgage applicationrnvolume continued a downward spiral during the week ended May 15.  The Mortgage Bankers Association’s (MBA’s)rnMarket Composite Index, a measure of application volume, was down 1.5 percentrnon a seasonally adjusted basis compared to the previous week.   On anrnunadjusted basis it was down 2.0 percent. The index has now declined for fourrnstraight periods by an average for the adjusted index of 2.97 percent each week.rn</p

The decline of thernComposite Index this week was driven the largest drop in purchase mortgagesrnsince February.  Both the seasonallyrnadjusted and the unadjusted Purchase Indexes were down by 4 percent from thernprevious week although the unadjusted Purchase Index remained 11 percent higherrnthan during the same week in 2014.  Refinancingrnincreased slightly, gathering a 52 percent share of all applications comparedrnto 51 percent the previous week as the Refinance Index rose 0.3 percent. </p

Refinance Index vs 30 Yr Fixed</p

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Purchase Index vs 30 Yr Fixed</p

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Mike Fratantoni, MBA’s Chief Economistrnsaid “Mortgage rates increasedrnlast week, and Treasury rates increased to a recent high at mid-week before fallingrnat the end of the week. Overall purchase activity fell for the week, along with conventional refinance volume, but government refinance volume increased. The level of purchase applications remained 11 percent higher than the samernweek last year, but the drop thisrnweek may indicate borrowers being wary of the recent run up inrnmortgage rates.” </p

The averagerncontract interest rate for 30-yearrnfixed-rate mortgages (FRM) withrnconforming loan balances ($417,000 or less) increasedrnto 4.04 percent, its highest level since December 2014, fromrn4.00 percent.  Points declined to 0.32 from 0.36 andrnthe effective rate increased. </p

Thirty-year FRM withrnjumbo loan balances (greaterrnthan $417,000) had an average contract rate of 4.04 percent, up from 3.99 percent a weekrnearlier.  Points decreased to 0.25 from 0.33 and the effective rate increased. </p

The average rate for 30-yearrnFRM backed by the FHA rose 4 basis points to 3.80   percent with points falling to 0.06 from 0.14.  The effectivernrate increased from the previousrnweek. </p

The average contractrninterest rate for 15-year fixed-raternmortgages increasedrnto 3.26 percent from 3.23 percentrnwhile points decreased from 0.40 to 0.30. rnThere was no change from the previous week in the effective interestrnrate.</p

The effective and therncontract interest rate for 5/1 adjustablernrate mortgages (ARMs) were both down, the contract rate dipping onernbasis point to 2.99 percent while points eased to 0.45 from 0.46.  The market share of ARMs increased from 6.3rnpercent to 6.4 percent for the week.</p

MBA’s Weekly MortgagernApplication Survey has been conducted since 1990.  The survey covers over 75 percent of all U.S. retail residential mortgage applications and respondents include mortgage bankers,rncommercial banks and thrifts.rn  Base period and value for allrnindexes is March 16, 1990=100 andrninterest rate information assumes loans with an 80 percent loan-to-value ratiornwith points including the origination fee.

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