Mortgage applications declined 4.2% last week on a seasonally adjusted basis, as economic concerns appeared to weigh on homebuying activity, according to a weekly survey conducted by the Mortgage Bankers Association (MBA).
The 4.2% decrease was an improvement from the MBA’s previous weekly survey, when mortgage applications had a steep 12.7% week-over-week fall driven by rising interest rates.
“Mortgage application activity, particularly for home purchases, continues to be subdued by broader economic uncertainty and signs of labor market weakness, dropping to the slowest pace since February,” Joel Kan, MBA’s vice president and deputy chief economist, said in a press release. “Even with the spring homebuying season underway, purchase applications decreased, as conventional and VA applications saw declines of 6% and 4%, respectively.”
Both the MBA’s seasonally adjusted purchase index and its refinance index fell 4% from the prior week. The refinance share of mortgage activity was unchanged at 37.3% of total applications after falling by 4% in the MBA’s previous weekly survey.
Kan noted that the dip in refinance activity was likely due to borrowers holding out for a bigger decline in interest rates. He added: “Given the pullback in refinancing, the average loan size for refinances declined to just under $290,000, the lowest level in three months.”
The adjustable-rate mortgage (ARM) share of loan activity declined to 7.4% of total applications. The Veterans Affairs share decreased to 13.1% from 13.4% for the week ending April 18. The U.S. Department of Agriculture share increased to 0.6% from 0.4% the prior week, while the Federal Housing Administration share of total applications was unchanged at 16.7%.
The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.89% from 6.9% the prior week, according to the MBA, while 30-year rates for mortgages with jumbo loan balances greater than $806,500 decreased to 6.88% from 6.9%.
The 15-year fixed-rate mortgage averaged 6.17% compared to 6.2% for the week ending April 18, while rates for 5/1 ARMs decreased to 5.89% from 6.01%, according to the MBA.
