The pace of mortgage application increases slowed last week, rising 1.1% on a seasonally adjusted basis for the week ending May 9, according to data from the Mortgage Bankers Association.
The increase was a marked change from the 11% jump in mortgage applications for the week ending May 2, as homebuyers turned out for spring open houses and were ready to make offers. One of the big changes last week was the refinance market appeared to cool, decreasing 0.4% from the previous week, but still up 44% from the same week last year.
Refinancing accounted for 36.4% of mortgage activity during the week, down from 37.1% the previous week. The adjustable-rate mortgage share of activity decreased to 7.4% of total applications.
The Federal Housing Administration (FHA) share of total applications increased to 17.4% from 16.4% the week before. U.S. Department of Veterans Affairs home loan applications increased a tick to 13.4% from 13.3% the previous week. The U.S. Department of Agriculture level of applications was unchanged at 0.5%.
The average 30-year fixed-rate mortgage for conforming loan balances ($806,500 or less) increased to 6.86% from 6.84% the previous week. The interest rate on jumbo loans (greater than $806,500) decreased slightly to 6.85% from the previous week’s 6.86%. FHA 30-year loans offered an average interest rate of 6.12%, down from 6.17%.
Mike Fratantoni, MBA’s senior vice president and chief economist, said in a prepared statement that last week saw steadier mortgage rates, as the Federal Reserve decided to keep the benchmark federal funds rate unchanged at its current range of 4.25% to 4.5%. However, market movements led to a small two-basis-point increase in the 30-year conforming rate to 6.86%.
“Refinance volume was little changed for the week, with a small increase in government refinances, and a decrease in conventional refinances,” Fratantoni said in a statement. “The news for the week was that growth in purchase applications was up 2.3% and almost 18% higher than last year’s pace. Despite economic uncertainty, the increase in home inventory means there are additional properties to buy, unlike the last two years, and this supply is supporting more transactions.”
