Mortgage application volume sank 5.2% during the week ended May 31, as the average rate for a 30-year, fixed-rate mortgage increased to 7.07%, up from 7.05% last week, according the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
This week’s results include an adjustment for the Memorial Day holiday.
Applications for refinances decreased 7% compared with the previous week but were up 5% compared with the same week one year ago.
Applications for purchases decreased 4% compared with the previous week and were down 13% compared with the same week one year ago.
“Mortgage rates moved slightly higher last week, with the 30-year conforming rate reaching 7.07 percent – its highest level since early May – despite incoming data indicating somewhat slower economic growth,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a release. “After adjusting for the Memorial Day holiday, both purchase and refinance application volumes were down, with purchase activity specifically 13 percent below last year’s level.
“Government purchase volume was down less, helped by growth in VA applications,” Fratantoni adds. “The market is relying on first-time homebuyer demand, and many first-time buyers do use government lending programs.”
The refinance share of mortgage activity decreased to 31.1% of total applications, down from 31.3% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 6.7% of total applications.
Photo: Romain Dancre