Two weeks after the average 30-year mortgage rate hit its lowest level since October and home purchase applications surged 20%, mortgage applications are now seeing their second week of significant declines after rates have since bounced up 30 basis points hitting 6.9% this past week.
According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending April 18, the Market Composite Index (a measure of mortgage loan application volume) decreased 12.7% from the previous week’s 8.5% decrease. On an unadjusted basis, the Index decreased 11% compared with the previous week.
“Overall mortgage application activity declined last week, as rates increased to their highest level in two months,” said Joel Kan, MBA’s vice president and deputy chief economist. “The 30-year fixed rate rose for the second straight week to 6.9 percent, an almost 30-basis-point increase over two weeks. These higher rates drove a 20 percent drop in refinance applications, especially for higher balance loans, with the average loan size falling substantially. The refinance share of applications at 37.3 percent was the lowest since January.”
MBA reported that the refinance share of mortgage activity decreased to 37.3% of total applications this week from 41.3% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.5 percent of total applications, per MBA’s reporting.
“Similar to the previous week, economic uncertainty and rate volatility impacted prospective homebuyers as we saw a 7 percent decline in purchase applications,” Kan added. “Both conventional and government purchase activity fell relative to the week before, but the overall level of purchase applications was still 6 percent higher than a year ago.”
To view all of this week’s mortgage application data, click here.
