MBA Index's Refi Drop Outweighs Purchase Jump

There has been a modest increase in demand for home purchase loans, but the drop-off in demand for refinances had more of an effect on the Market Composite Index, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. For the week ended May 8, the MCI — an overall measure of mortgage applications — was 895.6, a decrease of 8.6% on a seasonally adjusted basis from 979.7 one week earlier. The refinance share of mortgage activity decreased to 71.9% of total applications from 74.4% the previous week. The Refinance Index decreased 11.2% to 4588.6 from 5169.3 the previous week and the seasonally adjusted Purchase Index increased 0.5% to 265.7 from 264.3 one week earlier. On an unadjusted basis, the MCI decreased 8.1% compared with the previous week and increased 28.4% compared with the same week one year earlier. Adjustable-rate mortgages accounted for 2.3% of applications up from 2.1% for the previous week, the MBA said. There was a very slight decrease in the average contract interest rate for 30-year fixed-rate mortgages to 4.76% from 4.79%, with points (including the origination fee) increasing to 1.18 from 1.11 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.