Raw mortgage application activity slid 18.1% in the week ending April 24, according to a weekly survey released Wednesday by the Mortgage Bankers Association (MBA). The four-week moving average fell 4.9% after remaining up 0.3% the previous week, indicating a sudden drop in seasonal strength of mortgage application activity. The volume of applications for refinance plummeted 21.9% while the four-week moving average of refi activity slipped 5.7%. The refi share of total mortgage applications fell to 75.3% from 79.7% the previous week, according to the MBA survey. Bank of America (BAC) analysts say the low refi index last week followed a decline in origination selling volume, although the overall lack of any significant refi volume spike in April “puzzles” the market. Most market participants say they expected refi volume to pick up after streamlined refinancings became available April 4. “It appears that the combination of some originators not being ready to accept streamlined refi applications, some mortgage origination channels (like correspondent channels) not being active for the HASP refi program and the extreme sensitivity of borrowers to mortgage rate levels may have limited the mortgage origination/application volume so far this month,” says one analyst. “However, it is still not clear to us why the refi index remains as low as it is.” What is clear, the analyst adds, is a low level of refis in April indicates May’s prepayment speeds — or the rate of immediate repayments seen in securities when securitized mortgages refinance — are likely to remain much lower than touted when the Administration announced the streamlined refi program. Purchase applications, on the other hand, eased at a much slower rate than refi apps. The rate of decline in the index measuring purchase applications slowed to 0.6% this week, from 4.2% last week and 11.3% a week earlier. Conventional purchase application volume slipped 1.4% and government purchase application volume — think FHA-insured loan applications, here — ticked up 0.8% for the week, according to the MBA. A separate survey, conducted by Mortgage Maxx LLC found that application activity adjusted for multiple applications from a single household rose only 0.1% in the week ending April 24 after rising 3% the previous week. Household activity in California alone rose 0.2% after its 6.4% gain the week before, the study found. The Mortgage Application Index — or MAX — publisher Paul Descloux, in his weekly commentary on the index, said the weekly applications remain largely unchanged since last week as “applications may have reached their full potential.” The MAX’s virtually static results from the week, combined with the MBA’s dive in raw activity, suggests interest by number of households remains unchanged although the number of mortgage applications per household dropped by nearly one-fifth. The data suggest individual household optimism in terms of obtaining a purchase or refinance mortgage fell nearly 20% this week. In other words: An unchanged number of households submitted one-fifth fewer applications this week, even as 30-year and 15-year average fixed mortgage rates slipped to 4.62% and 4.45%, respectively, the MBA found. “Even with the cheerleading about refinancing and affordability from the media and the [National Association of Realtors], the other side of the equation remains extremely challenged,” the MAX’s Descloux wrote. “Organic [non-foreclosure] home sales have reached the basest of levels and credit from all angles is problematic. As home prices continue to slide, more and more home owners will slip underwater, eliminating refinancing or sale opportunities as well as ramping up the chance for a [Notice of Default].” Visit www.mbaa.org and www.mortgagemaxx.us for further details. Write to Diana Golobay at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.