After decreasing for four consecutive weeks, mortgage applications reversed course and increased 2.7% during the week ended May 3, as the average rate for a 30-year fixed-rate mortgage fell slightly to 4.41%, down from 4.42%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances increased 1% while applications for purchases increased 4%, compared with the previous week.
On an unadjusted basis, total volume increased 3% compared with the previous week. Applications for purchases increased 5% on an unadjusted basis and were up 5% compared with a year earlier.
“We saw a good week for the spring home buying season, as a five percent increase in purchase applications – both weekly and year-over-year – drove the results,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Average loan amounts also stayed elevated, with government purchase applications rising to the highest in the survey. Even with slower price appreciation in higher-priced markets, home prices are still rising enough to push average loan sizes higher.”
The refinance share of mortgage activity decreased to 37.9% of total applications, down from 38.8% the previous week
“With purchase activity increasing and mortgage rate movements mostly unchanged, the refinance share of applications were at their lowest level since last November,” Kan says.
The adjustable-rate mortgage (ARM) share of activity increased to 6.4% of total applications.
The average rate for a 5/1 ARM, based on closings, was 3.88%, up from 3.81%.