Although purchase activity remains solid, a drop in refinances contributed to mortgage applications declining further for the week ending May 1, 2019, according to the Mortgage Bankers Association.

According to MBA's weekly Mortgage Applications Survey, on an unadjusted basis, the Market Composite Index retreated 4.3% from the previous week. 

“Applications to refinance and purchase a home both fell, but purchase activity still remained slightly above year ago levels,” MBA Vice President of Economic and Industry Forecasting Joel Kan said. "The drop in refinances were driven by fewer FHA and VA loan applications, which typically lag the movement of conventional loans.”

“The ARM share of applications decreased to 6.2%, its lowest share since August 2018,” Kan continued. “So far in 2019, we continue to see a preference for 7/1 ARMs, which account for around 36% of all ARM applications, followed by 10/1 and 5/1 ARMs."

Kan said this is another indication that borrowers who choose to apply for ARM loans are electing to reap the benefit of lower rates. 

The Refinance Index fell 5% from the previous week and the unadjusted Purchase Index declined 3% from a week ago but remains 1% higher than the same week in 2018. Lastly, the seasonally adjusted Purchase Index decreased 4% from the week before.

Here's a more detailed breakdown of this week's mortgage application data:

• The refinance share of mortgage activity decreased to 38.8% of total applications, slightly falling from 39.4% the previous week.
• The adjustable-rate mortgage share of activity retreated to 6.2% of total applications.
• The Federal Housing Administration's share of mortgage apps moderately fell to 9.5% from last week’s 9.9%.
• The Veterans Affairs' share of applications declined to 10.9% from last week’s 11.3%.
• The Department of Agriculture's share of total applications held its ground from last week’s 0.6%.
• Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) dropped from 4.46% to 4.42%.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) fell from last week’s 4.35% to 4.31%.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA moved backward from last week’s 4.49 to 4.39%.
• The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.81% from 3.87% the week prior.
• The average contract interest rate for 5/1 ARMs declined to 3.81% from last week’s 3.91%.