Purchase Applications Drive MBA Weekly Survey

Mortgage applications, buoyed by strong purchase application activity and stable, low interest rates  increased from one week earlier, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending May 22. 

The Market Composite Index increased by 2.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 3 percent compared to the previous week. 

The unadjusted Refinance Index decreased by 0.2 percent from the previous week but was 176 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 62.6 percent of total applications from 64.3 percent the previous week.

The seasonally adjusted Purchase Index increased by 9 percent from one week earlier. The unadjusted Purchase Index increased by 7 percent compared to the previous week and was 9 percent higher than the same week one year ago.

“The home purchase market continued its path to recovery as various states reopen, leading to more buyers resuming their home search,” said Joel Kan MBA Associate Vice President of Economic and Industry Forecasting. “Purchase applications increased 9 percent last week – the sixth consecutive weekly increase and a jump of 54 percent since early April. Additionally, the purchase loan amount has increased steadily in recent weeks and is now at its highest level since mid-March.”

Looking at the impact at the state level, here are results showing the non-seasonally adjusted, week over week percent change in the number of purchase applications from Washington, California and New York:

The FHA share of total applications decreased to 11.2 percent from 11.5 percent the week prior. The VA share of total applications decreased to 12.4 percent from 13.4 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.42 percent from 3.41 percent, with points unchanged at 0.33 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.71 percent from 3.66 percent, with points decreasing to 0.29 from 0.37 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA decreased to 3.41 percent from 3.46 percent, with points decreasing to 0.30 from 0.33 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.87 percent from 2.88 percent, with points increasing to 0.30 from 0.27 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages decreased to 3.08 percent from 3.19 percent, with points increasing to 0.01 from -0.05 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity increased to 3.4 percent of total applications.

The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.