Purchase Increase Fails to Offset Refinance Decline

An increase in weekly loan purchase applications failed to offset a decline in refinancing from a recent rate spike, according to the Mortgage Bankers Association's index. The MBA's Weekly Applications Survey Market Composite Index fell over 16% on a seasonally- and holiday-adjusted basis. For the week ended May 29, the MCI was 658.7, compared with 786.0 one week earlier. The refinance share fell to 62.4% of total applications from 69.3% the previous week. The Refinance Index decreased 24.1% to 2953.6 from 3890.4 the previous week. But the seasonally adjusted Purchase Index increased 4.3% to 267.7 from 256.6 one week earlier. On an unadjusted basis, the index decreased 32.5% compared with the previous week and increased 14.4% compared with the same week one year earlier. Adjustable-rate mortgages accounted for 3% of applications, up from 2.6% for the previous week. There was an increase in the average contract interest rate for 30-year fixed-rate mortgages to 5.25% from 4.81%, with points (including the origination fee) decreasing by 26 basis points to 1.02 from 1.28 for loans with 80% loan-to-value ratios. The MBA can be found online at http://www.mortgagebankers.org.