According to the Mortgage Bankers Association (MBA), there was a fifth increase in mortgage applications in six weeks. After being seasonally adjusted, the Mortgage Bankers Association’s Market Composite Index, which gauges mortgage loan application volume, surged by 5.3 percent compared to the previous week. Before adjustment, the index increased by 6.0 percent.
Almost all of the gains in mortgage applications came from applications for home purchases, although there was a slight increase of 0.1 percent in the Refinance Index. Refinance activity has decreased by 57 percent compared to the same week last year. The proportion of applications for refinancing was 27.0 percent, which was slightly lower than the 28.6 percent during the last week of March.
The Purchase Index, which was seasonally adjusted, rose by 8.0 percent, and on an unadjusted basis, it increased by 9.0 percent. However, compared to the first week of April 2022, the unadjusted index was 31 percent lower.
Mike Fratantoni, the Senior Vice President and Chief Economist of MBA, stated that the 30-year fixed rate declined to 6.30 percent, which is the lowest level in two months, due to the recent job market slowdown. Prospective homebuyers have been sensitive to fluctuations in mortgage rates this year, and as a result, purchase applications increased by 8 percent last week. While VA refinance volume increased, the total refinance application volume remained almost unchanged, and conventional volume decreased last week. However, refinance activity is still considerably lower than the previous year, with almost 60 percent less activity, as most homeowners are holding mortgages at significantly lower rates.
In MBA’s Weekly Mortgage Applications Survey, the average loan size increased to $387,700 from $381,100 the prior week, while the average size of purchase loans rose from $428,000 to $481,900. The share of total applications for FHA increased to 12.3 percent from 12.0 percent, while VA share surged to 12.8 percent from 11.0 percent in the prior week. The average contract interest rate for conforming 30-year fixed-rate mortgages (FRM) declined to 6.30 percent, along with a decrease in points to 0.55. Jumbo 30-year FRM rate also fell to 6.26 percent, and points were reduced to 0.42.