Mortgage applications decreased 4.6 percent from a week ago, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 19.
The Refinance Index decreased 5 percent from the previous week and was 44 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week ago.
The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 30 percent lower than the same week one year ago.
“Mortgage applications declined almost five percent last week as borrowers remained sensitive to higher rates. The 30-year fixed rate increased to 6.69 percent, the highest level since March,” says Joel Kan, MBA’s vice president and deputy chief economist.
“Since rates have been so volatile and for-sale inventory still scarce, we have yet to see sustained growth in purchase applications,” he adds. “Refinance activity remains limited, with the refinance index falling to its lowest level in two months and more than 40 percent below last year’s pace.
“Investors remained attuned to the uncertainty around the U.S. debt ceiling and communication from several Federal Reserve officials last week, which sent Treasury yields higher, along with mortgage rates,” Kan says. “Economic data released over the past week have also pointed to a still-resilient economy. The housing market received positive data on new residential construction – which is seen as a key solution to the lack of housing inventory.”
The refinance share of mortgage activity remained unchanged at 27.4 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.7 percent of total applications.
The FHA share of total applications increased to 12.5 percent from 12 percent the week prior. The VA share of total applications increased to 12.5 percent from 12.2 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.
