Mortgage application volume decreased for fourth consecutive week, falling 4.3% despite a drop in the average rate for a 30-year fixed rate mortgage to 4.42% from 4.46%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
For the week ended April 26, applications for refinances decreased 5% while applications for purchases fell 4%.
On an unadjusted basis, total volume fell 4% compared with the previous week. Applications for purchases decreased 3% on an unadjusted basis but were 1% higher compared with the same week one year earlier.
“Mortgage rates were lower last week – with the 30-year fixed rate declining to 4.42% – as concerns over global growth, particularly in Germany, outweighed more positive domestic news on first quarter GDP growth and business investment,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Applications to refinance and purchase a home both fell, but purchase activity still remained slightly above year ago levels. The drop in refinances were driven by fewer FHA and VA loan applications, which typically lag the movement of conventional loans.”
The refinance share of mortgage activity decreased to 38.8% of total applications, down from 39.4% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 6.2% of total applications.
It was the lowest ARM share since August 2018.
“So far in 2019, we continue to see a preference for 7/1 ARMs, which account for around 36 percent of all ARM applications, followed by 10/1 and 5/1 ARMs,” Kan says. “This is another indication that the few borrowers who choose to apply for ARM loans are electing to reap the benefit of lower rates, as well as some rate stability.”
The average rate for a 5/1 ARM, based on closings, was 3.81%, down from 3.92%.