Indexes tracking home-purchase and refinance application activity both saw increases this week, supported by a 9-basis-point decrease in mortgage rates last week that followed easing of tensions in the Middle East.
According to the latest Market Composite Index from the Mortgage Bankers Association (MBA)—its measure of mortgage loan activity volume and includes purchases and refinances—increased 1.8% on a seasonally adjusted basis from last week’s 0.8% decrease, for the week ending April 10. On an unadjusted basis, the Index increased 2% compared with the previous week.
“Given the evolving situation in the Middle East and its impact on energy and commodity prices, mortgage rates declined last week,” said Joel Kan, MBA’s vice president and deputy chief economist. “The 30-year fixed rate decreased to 6.42 percent, its lowest level in a month. This dip in rates helped to support an increase in conventional refinance applications, which had declined for five consecutive weeks.
“Purchase activity remained subdued as potential homebuyers remained hesitant given the current economic uncertainty, which kept purchase applications below last year’s level for the second consecutive week,” Kan added. “Conventional purchase applications were essentially unchanged over the week, while FHA and VA purchase applications declined.”
MBA’s Refinance Index increased 5% from the previous week and was 15% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1% from one week earlier. The unadjusted Purchase Index was unchanged compared with the previous week and was 3% lower than the same week one year ago.
The refinance share of mortgage activity increased to 45.5% of total applications from 44.3% the previous week. The adjustable-rate mortgage (ARM) share of activity was back down again this week, decreasing to 8.4% of total applications.
MBA reported that the FHA share of total applications decreased to 18.2% from 19.3% the week prior. The VA share of total applications decreased to 15.7% from 16.1% the week prior. The USDA share of total applications remained unchanged at 0.5% from the week prior.
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