Mortgage Applications Up for Third Straight Week

Thanks to the recent declines in average mortgage rates of late, mortgage application activity has seen a small but steady increase for the third-straight week. This week, applications are up 1.9% from last week’s slight uptick of 0.5%, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending May 17, 2024. 

This week’s numbers: 

• The Market Composite Index, a measure of mortgage loan application volume, increased 1.9% on a seasonally adjusted basis from one week earlier. 
• On an unadjusted basis, the Index increased 1.1% compared with the previous week. 
• The Refinance Index increased 7% from the previous week and was 21% higher than the same week one year ago. 
• The seasonally adjusted Purchase Index decreased 1% from one week earlier. 
• The unadjusted Purchase Index decreased 2% compared with the previous week and was 11% lower than the same week one year ago.
• The refinance share of mortgage activity increased to 34.0% of total applications from 32.0% the previous week. 
• The adjustable-rate mortgage (ARM) share of activity decreased to 6.6% of total applications.
• The FHA share of total applications increased to 12.8% from 12.4% the week prior. 
• The VA share of total applications increased to 13.7% from 12.7% the week prior. 
• The USDA share of total applications decreased to 0.3% from 0.4% the week prior.
• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.01% from 7.08%, with points decreasing to 0.60 from 0.63 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) decreased to 7.18% from 7.22%, with points decreasing to 0.44 from 0.58 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.  
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.77% from 6.86%, with points decreasing to 0.88 from 0.94 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.42% from 6.61%, with points decreasing to 0.54 from 0.65 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 5/1 ARMs decreased to 6.48% from 6.56%, with points decreasing to 0.55 from 0.66 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week. 

MBA’s comments: 

“The 30-year fixed mortgage rate declined for the third straight week, dropping to 7.01%—the lowest level in seven weeks,” said Joel Kan, MBA’s vice president and deputy chief economist. “Rates coming down from recent highs spurred some borrowers to act, with increases across both conventional and government refinance applications. VA refinances had a double-digit increase for the third consecutive week, although the current level of refinancing is still well below its historical average. Purchase activity continues to lag despite this recent decline in rates, down 11% from a year ago, as potential buyers still face limited for-sale inventory and high list prices.”