Inflation and deficit concerns coupled with a spike in mortgage rates resulted in home purchase applications pulling back this past week.
According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending May 16, the Market Composite Index (a measure of mortgage loan application volume) decreased 5.1% from the previous week’s 1.0% increase. On an unadjusted basis, the Index decreased 5% compared with the previous week.
“Mortgage rates jumped to their highest level since February last week, with investors concerned about rising inflation and the impact of increasing deficits and debt,” said Mike Fratantoni, MBA’s SVP and chief economist. “Higher rates, including the 30-year fixed rate increasing to 6.92%, led to a slowdown across the board. However, purchase applications are up 13% from one year ago.”
The Refinance Index decreased 5% from the previous week and was 27% higher than the same week one year ago, MBA reported. The seasonally adjusted Purchase Index decreased 5% from one week earlier. The unadjusted Purchase Index decreased 6% compared with the previous week and was 13% higher than the same week one year ago.
The refinance share of mortgage activity increased to 36.6% of total applications from 36.4% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.1% of total applications.
To see all of this week’s mortgage application data, click here.
