Mortgage applications decreased 2.3% 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 27.
On an unadjusted basis, the Index decreased 3% compared with the previous week. The Refinance Index decreased 5% from the previous week and was 75% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1% from one week earlier. The unadjusted Purchase Index decreased 2% compared with the previous week and was 14% lower than the same week one year ago.
“Mortgage rates fell for the fourth time in five weeks, as concerns of weaker economic growth and the recent stock market sell-off drove Treasury yields lower. Mortgage applications decreased to the lowest level since December 2018, as the purchase market continues to struggle with supply and affordability challenges,” states Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “With the 30-year fixed rate at 5.33 percent, the refinance market continues to shrink, led by larger decreases last week for FHA and VA refinance applications. The refinance index was 75 percent below last year’s level, when rates were more than 200 basis points lower.”
“Purchase applications last week were 14 percent lower than last year, with more activity in the larger loan sizes,” continues Kan. “Demand is high at the upper end of the market, and supply and affordability challenges are not as detrimental to these borrowers as they are to first-time buyers.”
The refinance share of mortgage activity decreased to 31.5% of total applications from 32.3% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.7% of total applications.
The FHA share of total applications decreased to 10.8% from 11.3% the week prior. The VA share of total applications decreased to 10.2% from 10.4% the week prior. The USDA share of total applications remained unchanged at 0.5% from the week prior.
Image: Zac Gudakov on Unsplash
