Wednesday, May 06, 2020

MBA: Mortgage Applications Increased Slightly, Purchase Applications up 6% Week over Week

by Calculated Risk on 5/06/2020 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 1, 2020.

... The Refinance Index decreased 2 percent from the previous week and was 210 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 7 percent compared with the previous week and was 19 percent 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 percent – 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 percent below year-ago levels, this annualized deficit has decreased as more states reopen amidst the apparent, pent-up demand for homebuying.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.40 percent from 3.43 percent, with points decreasing to 0.30 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Mortgage Refinance IndexClick on graph for larger image.


The first graph shows the refinance index since 1990.

The refinance index has been very volatile recently depending on rates and liquidity.

But the index is way up from last year (over triple last year).

Mortgage Purchase Index The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 19% year-over-year.

Purchase activity has fallen sharply, but was up 6% week over week.

Note: Red is a four-week average (blue is weekly).