Mortgage applications increased 0.1% from one week earlier, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending May 1, 2020.
The Market Composite Index, a measure of mortgage loan application volume, increased 0.1% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1% compared with the previous week. The Refinance Index decreased 2% from the previous week and was 210% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 6% from one week earlier. The unadjusted Purchase Index increased 7% compared with the previous week and was 19% lower than the same week one year ago.
"Mortgage application volume was unchanged last week, even as the 30-year fixed rate mortgage declined to 3.40% - a new record in MBA's survey," said Mike Fratantoni, MBA's senior vice president and chief economist. "Despite lower rates, refinance applications dropped, as many lenders are offering higher rates for refinances than for purchase loans, and others are suspending the availability of cash-out refinance loans because of their inability to sell them to Fannie Mae and Freddie Mac."
Added Fratantoni, "Purchase volume increased for the third week in a row, led by strong growth in Arizona, Texas and California. Although purchase activity remains almost 19% below year-ago levels, this annualized deficit has decreased as more states reopen amidst the apparent, pent-up demand for homebuying."
The refinance share of mortgage activity decreased to 70.0% of total applications from 71.6% the previous week. The adjustable-rate mortgage share of activity increased to 3.0% of total applications.
Looking at the impact at the state level, here are results showing the non-seasonally adjusted, week-over- week% change in the number of purchase applications from Washington, California and New York:
The FHA share of total applications decreased to 11.1% from 11.5% the week prior. The VA share of total applications remained unchanged from 13.3% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.40% from 3.43%, with points decreasing to 0.30 from 0.34 (including the origination fee) for 80% loan-to-value ratio 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 $510,400) decreased to 3.69% from 3.72%, with points increasing to 0.34 from 0.33 (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 3.37% from 3.39%, with points remaining unchanged at 0.20 (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 2.93% from 2.98%, with points increasing to 0.29 from 0.28 (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 3.20% from 3.29%, with points increasing to 0.36 from 0.00 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
