Mortgage Applications Down 4.6% on Lower Refi Volume

Mortgage applications were down 4.6% on a seasonally adjusted basis for the week of May 1, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

On an unadjusted basis, the index decreased 4% compared with the previous week.

The Refinance Index was down 8% from the previous week to its lowest level since January. The refinance share of mortgage activity fell from 55% of total applications in the previous week to 53%. The adjustable-rate mortgage share of activity increased to 6.1% of total applications.

"Refinance volume dropped last week as rates in the U.S. increased sharply towards the end of the week, with signs of recovery in Europe lifting rates across the globe," said Mike Fratantoni, MBA's chief economist.

The seasonally adjusted Purchase Index went up 1% from the previous week to its highest level since June 2013. The unadjusted Purchase Index went up 2% from the previous week and 12% higher than the same week in 2014. The average loan size for purchase applications rose to a survey high of $297,400.

"Purchase activity increased slightly over the week, and the average loan amount for a purchase application reached a record high, a sign that the mix of purchase activity is still skewed toward higher priced homes," Fratantoni said.

The FHA share of total applications increased from 13.7% the week prior to 14%, and the VA share from 11.3% to 11.9%. The USDA share remained unchanged at 0.8% from the previous week.

Effective average contract interest rates for 30-year fixed-rate mortgages increased from last week.

Rates for those with conforming loan balances of $417,000 or less went up from 3.85% to 3.93%. Those with jumbo loan balances greater than $417,000 increased from 3.82% to 3.91%.

Rates backed by the FHA increased from 3.66% to 3.7%.

The average contract interest rate for 15-year fixed-rate mortgages saw an increase from 3.14% to 3.19%; for 5/1 ARMs, a decreased from 2.88% to 2.87%.

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