Despite ongoing geopolitical uncertainty, recent mortgage rate declines have boosted mortgage application activity for a second week in a row.
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 7.9% on a seasonally adjusted basis from last week’s 1.8% increase, for the week ending April 17. On an unadjusted basis, the Index increased 9% compared with the previous week.
“Mortgage rates declined last week as financial markets responded positively to the Middle East ceasefire and the lower trend in oil prices, with the 30-year fixed rate decreasing to 6.35 percent,” said Mike Fratantoni, MBA’s SVP and chief economist. “Despite the geopolitical uncertainty, housing demand is being supported by a still resilient job market, and homebuyers are experiencing a buyer’s market in most of the country given the higher levels of inventory relative to last year.”
Fratantoni said refinance application volume increased by 6 percent, while purchase application volume increased an even stronger 10 percent and was up 14 percent compared to last year’s pace. The increase was led by conventional purchase loans up 11 percent over the week, he noted.
According to this week’s report, MBA’s Refinance Index increase was 15% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 10% from one week earlier. The unadjusted Purchase Index 12% compared with the previous week and was 14% higher than the same week one year ago.
The refinance share of mortgage activity decreased to 44.2% of total applications from 45.5% the previous week. The adjustable-rate mortgage (ARM) share of activity was down again this week, decreasing to 8.0% of total applications.
MBA reported that the FHA share of total applications remained unchanged at 18.2%. The VA share of total applications decreased to 15.0% from 15.7% the week prior. The USDA share of total applications remained unchanged at 0.5% from the week prior.
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