MBA: Mortgage Application Rate Grew by 2 Percent in One Week


Mortgage applications increased 2% on a seasonally adjusted basis from one week earlier, according to Market Composite Index data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 6.

The Refinance Index decreased 2% from the previous week and was 72% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 5% from one week earlier. The unadjusted Purchase Index increased 5% compared with the previous week and was 8% lower than the same week one year ago.

“The increase in mortgage applications last week was driven by a strong gain in application activity for conventional and government purchase loans, even as mortgage rates rose to their highest level – 5.53 percent – since 2009. Despite a slow start to this year’s spring home buying season, prospective buyers are showing some resiliency to higher rates. Purchase activity has now increased for two straight weeks,” observes Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.

“More borrowers continue to utilize ARMs to combat higher rates. The share of ARMs increased to 11 percent of overall loans and to 19 percent by dollar volume,” adds Kan. “The rapid rise in mortgages rates continues to hit the refinance market, with activity 70 percent below a year ago. Most homeowners refinanced to lower rates in the past two years.”

The refinance share of mortgage activity decreased to 32.4% of total applications from 33.9% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 10.8% of total applications.

The FHA share of total applications decreased to 10.5% from 11.1% the week prior. The VA share of total applications increased to 10.5% from 10.3% the week prior. The USDA share of total applications increased to 0.5% from 0.4% the week prior.

Photo by Trinity Nguyen on Unsplash

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