Mortgage applications decreased 5.7% from one week ago, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 12.
The Market Composite Index decreased 5.7% on a seasonally adjusted basis. On an unadjusted basis, the Index decreased 6% compared with the previous week.
The Refinance Index decreased 8% from the previous week and was 43% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4.8% from one week earlier. The unadjusted Purchase Index decreased 5% compared with the previous week and was 26% lower than the same week one year ago.
“Mortgage rates increased last week even as Treasury yields were essentially flat, with the spread between the two rates widening to 310 basis points. Mortgage application activity slowed, as most mortgage rates in the survey increased, with the 30-year fixed rate jumping nine basis points to its highest level in two months at 6.57%,” says Joel Kan, MBA’s vice president and deputy chief economist. “Purchase applications decreased 5% to its slowest pace in a month, as buyers remain wary of this rate volatility, but also as for-sale inventory in many parts of the country remains scarce.”
Adds Kan, “Refinance applications accounted for 27% of all applications and dropped almost 8% last week. Most borrowers have lower rates on their mortgages, and those who are in the market are extremely rate sensitive.”
The refinance share of mortgage activity decreased to 27.4% of total applications from 28% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.5% of total applications.
The FHA share of total applications decreased to 12% from 12.1% the week prior. The VA share of total applications decreased to 12.2% from 12.9% the week prior. The USDA share of total applications remained unchanged at 0.4% from the week prior.