Mortgage application volume fell 3.3% on an adjusted basis during the week ended April 24, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Although mortgage interest rates continued to hover near all-time lows, applications for refinances dropped 7% compared with the previous week.
Applications for home purchases, however, increased 12%. That’s “the strongest level in almost a month,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement.
“The ten largest states had increases in purchase activity, which is potentially a sign of the start of an upturn in the pandemic-delayed spring home buying season, as coronavirus lockdown restrictions slowly ease in various markets,” Kan says. “California and Washington continued to show increases in purchase activity, with New York seeing a significant gain after declines in five of the last six weeks.”
Kan says low rates and a slight easing of social distancing restrictions likely helped drive the increase in purchase applications.
For the week ended April 24, the average rate for a 30-year fixed-rate mortgage was 3.43%, down from 3.45%.
“Lenders are still working through pipelines at capacity, and observed changes in credit availability for refinance loans have also in turn impacted rates,” Kan says.
The refinance share of mortgage activity fell to 71.6% of total applications, down from 75.4% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 2.9% of total applications.