Mortgage applications decreased 1.2% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 20.
On an unadjusted basis, the Market Composite Index decreased 2% compared with the previous week. The Refinance Index decreased 4% from the previous week and was 75% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 0% from one week earlier. The unadjusted Purchase Index decreased 1% compared with the previous week and was 16% lower than the same week one year ago.
“The 30-year fixed rate declined for the second straight week to 5.46 percent but remains well above what borrowers were used to over the past two years,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Most refinance borrowers continue to remain on the sidelines as a result, and refinance applications have fallen in nine of the past 10 weeks. Compared to January 2022, refinance activity is down 66 percent.”
“Higher mortgage rates are also impacting purchase market conditions, as the purchase index remained close to lows last seen in the spring of 2020 when a significant portion of activity was put on hold due to the onset of the pandemic,” adds Kan. “Currently, higher rates, low inventory and high prices are keeping prospective buyers out of the market.”
The refinance share of mortgage activity decreased to 32.3% of total applications from 33% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.4% of total applications.
The FHA share of total applications increased to 11.3% from 11.1% the week prior. The VA share of total applications decreased to 10.4% from 10.5% the week prior. The USDA share of total applications remained unchanged at 0.5% from the week prior.