Despite a dip in rates, mortgage application volume decreased 1.2% on an adjusted basis during the week ended April 28, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances increased 1% compared with the previous week but were down 51% compared with the same week one year ago.
Applications for purchases decreased 2% compared with the previous week and were down 32% compared with a year ago.
“Mortgage applications decreased last week, despite rates declining slightly for the first time in three weeks,” says Joel Kan, vice president and deputy chief economist for the MBA, in a release. “The 30-year fixed rate decreased five basis points to 6.5 percent, which is still 114 basis points higher than a year ago.”
“Elevated rates continue to both impact homebuyer affordability and weaken demand for refinancing,” Kan says. “Home purchase activity has been very sensitive to rates and local market trends, including the very low supply of existing-home inventory. However, newly constructed homes account for a growing share of inventory, giving more options for prospective buyers.”
“The jumbo-conforming spread continues to narrow, an indication that there is reduced lender appetite for jumbo loans following the recent turmoil in the banking sector and heightened concerns about liquidity,” Kan adds. “The spread was 13 basis points last week, after being as wide as 64 basis points in November 2022.”
The refinance share of mortgage activity increased to 27.2% of total applications, up from 26.8%.
The adjustable-rate mortgage (ARM) share of activity increased to 7.3% of total applications.
Photo: Kelly Sikkema