Mortgage application volume increased 0.9%, on an adjusted basis, during the week ending May 16, compared to the previous week, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, volume was up 0.4%.
Refinance volume was up about 4%, on an adjusted basis, due mainly to the recent dip in mortgage interest rates, while purchase application volume was down about 3%.
On an unadjusted basis, purchase application volume decreased 3% compared with the previous week and was 12% lower compared to the same week one year ago.
As a result of the recent increase in refinance application volume and the dip in purchase volume, the refinance share of mortgage activity rebounded to 52% of total applications from 50% the previous week.
Two weeks ago, refinance volume fell to below 50% of all volume – the first time that's happened since 2009.
‘Renewed concerns about the state of the global economy, particularly in Europe, led to a flight to quality to U.S. Treasury securities, thereby pushing interest rates down in the U.S.,’ says Mike Fratantoni, chief economist for the MBA, in a release. ‘Rates on conforming loans hit six-month lows, and jumbo rates hit 12-month lows. Refinance volume picked up somewhat as a result, but it still remains more than 65 percent below last year's pace. Purchase volume continues to run more than 10 percent below last year's pace.’
The average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 4.33% for the week ending May 16, down from 4.39% the week prior.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 4.24%, down from 4.29% the previous week.
The average rate for 30-year FRM backed by the Federal Housing Administration was 4.06%, down from 4.09 the week prior.
The average contract interest rate for a 15-year FRM was 3.43%, down from 3.48% the week prior.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.14%, down from 3.17% the previous week. The ARM share of activity remained unchanged at 8% of total applications.
All rates are based on closings.