After dipping the previous week, mortgage application volume increased 2.4% on an adjusted basis during the week ended May 17, as the average rate for a 30-year fixed rate mortgage fell to 4.33%, down from 4.40%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances increased 8% while applications for purchases decreased 2%.
On an unadjusted basis, total volume increased 2% compared with the previous week. Applications for purchases decreased 3% on an unadjusted basis but were 7% higher compared with the same week one year earlier.
“Mortgage rates fell for the fourth straight week, with the 30-year fixed rate mortgage hitting its lowest level since January 2018, leading to a rebound in refinances,” says Joel Kan, associate vice president of economic and industry forecasting at the MBA, in a statement. “The refinance index increased eight percent to its highest level in over a month, and once again there was an increase in average refinance loan sizes, as borrowers with larger balances responded accordingly to lower rates.
“We’re keeping a close eye on whether there may be some adverse effects of the ongoing global trade disputes on overall demand,” Kan adds. “Some potential homebuyers may be delaying their home search until there’s more certainty.”
The refinance share of mortgage activity increased to 40.5% of total applications, up from 37.9% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 6.8% of total applications.
The average rate for a 5/1 ARM, based on closings, was 3.57%, down from 3.82%.