Mortgage applications decreased 3.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 29, 2020. This week’s results included an adjustment for the Memorial Day holiday.
… The Refinance Index decreased 9 percent from the previous week and was 137 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index decreased 7 percent compared with the previous week and was 18 percent higher than the same week one year ago.
“Purchase applications continued their recent ascent, increasing 5 percent last week and 18 percent compared to a year ago. The pent-up demand from homebuyers returning to the market continues to support a recovery from the weekly declines observed earlier this spring,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “However, there are still many households affected by the widespread job loss and current economic downturn. High unemployment and low housing supply may restrain a more meaningful rebound in purchase applications in the coming months.”
Added Kan, “In contrast to the upswing in purchase activity, refinance applications fell for the seventh consecutive week – even as the 30-year fixed rate hit another MBA survey-low of 3.37 percent. After reaching a peak of 76 percent earlier this year, refinances now account for less than 60 percent of activity, and the index is now at its lowest level since February 21.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.37 percent from 3.42 percent, with points decreasing to 0.30 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The first graph shows the refinance index since 1990.
The refinance index has been very volatile recently depending on rates and liquidity.
But the index is way up from last year.
According to the MBA, purchase activity is up 18% year-over-year.
Note: Red is a four-week average (blue is weekly).