Mortgage application volume increased 2.1% on a seasonally adjusted basis during the week ended May 7, as mortgage rates fell, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances increased 3% compared with the previous week, while applications for purchases were up 1%.
Year-over-year, applications for refinances were down 12% while applications for purchases were up 13%.
The average rate for a 30-year fixed-rate mortgage with conforming loan balance was 3.11%, down from 3.18% the previous week.
“Mortgage rates fell last week to the lowest levels since February, tracking the dip in Treasury yields,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “The decline in rates helped the refinance index reach its highest level in eight weeks, driven by a 4 percent increase in conventional refinances.
“Additionally, refinance loan balances increased for the fourth straight week, an indication that higher-balance borrowers acted to take quick advantage of lower rates,” Kan says. ”The first week of May was also strong for the purchase market. Applications were up 13 percent from a year ago, which was around the time the housing market awakened from the pandemic-induced stall in activity.
“Most markets this spring continue to see robust demand, but activity continues to be constrained by insufficient inventory levels, as well as homebuilder challenges related to the ongoing shortages and price increases for building materials,” Kan adds.
The refinance share of mortgage activity increased to 61.3% of total applications, up from 61.0% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 3.8% of total applications.
Photo: Paul Kapischka