Mortgage application volume surged 11% during the week ended May 2, as the average rate for a 30-year fixed-rate mortgage dropped to 6.84%, down from 6.89% last week, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances increased 11% compared with the previous week and were up 51% compared with the same week one year ago.
Applications for purchases also increased 11% compared with the previous week and were up 13% compared with the same week one year ago.
“The economic news last week included a negative reading for first-quarter GDP growth and further signs of contraction in the manufacturing sector, mixed with a solid employment report for April,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “The net impact on mortgage rates was mostly downward but just back to levels from early April. The 30-year fixed rate declined to 6.84 percent.”
“Conventional purchase application volume increased 13 percent and was up 9 percent from year-ago levels, a surprisingly strong move given lingering economic uncertainty,” Fratantoni says. “Borrowers of conventional loans tend to have larger loan sizes and more apt to be move-up buyers. Government purchase loans were also up 6 percent for the week, led by a 9 percent growth in FHA purchase applications.”
“With rates moving lower, refinance volume increased 11 percent, led by VA refinance applications, which were up 26 percent,” Fratantoni adds.
The refinance share of mortgage activity decreased to 37.1% of total applications, dow slightly from 37.3% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 8.3% of total applications.
Photo: Ben Mullins