Mortgage Applications Down as Rates Rise
Total mortgage application volume fell 8.6% for the week ending May 8, after ticking up 2% a week before, according to a survey just released by the Mortgage Bankers Association (MBA). Refinance applications also decreased in the week as mortgage rates ticked upward, indicating weakened homeowner interest in refi opportunities. The four-week moving average for all applications fell 5.1% from the previous week, suggesting continued seasonal weakness of raw application activity. The volume of applications for refinance fell 11.2% while the four-week moving average of refi activity slipped 6.5%. The refi share of total mortgage applications fell to 71.9% from 74.4% the previous week, according to the MBA survey. "Refinancing demand has trended down from its mid-April peak, while purchase mortgage demand has increased modestly in recent weeks, even after accounting for normal seasonal increases this time of year," MBA analysts wrote in the survey. The volume of purchase applications remained steady this week, rising 0.5% from a the previous week's 5% gain. A separate survey, conducted by Mortgage Maxx LLC found that application activity adjusted for multiple applications from a single household rose 1.4% in the same week ending May 8 after posting a similar gain the previous week. Household activity in California alone, however, declined 6.8% after increasing 3% the week before, the study found. The Mortgage Application Index — or MAX — publisher Paul Descloux, in his weekly commentary on the index, suggests weekly applications may have reached their full potential, especially in light of last week's uptick in mortgage rates, which have held near historic lows in recent weeks. Descloux referenced the Bankrate.com weekly interest rate survey, which showed 30-year loans at 4.98%, up four bps for the week. "What the headlines don't tell is the increasing expenses for those precious basis points," he adds. "A good example is the super low refi pace for over-taxed New York mortgagors." Visit www.mbaa.org and www.mortgagemaxx.us for further details.