As interest rates on home loans declined to a six-month low, weekly applications for mortgage refinances accelerated. But purchase financing activity was weaker.
A measure of mortgage application volume, the Market Composite Index, rose a seasonally adjusted 4 percent in the week ended May 19 from the prior week.
But the improvement in retail residential loan applications was just 3 percent from the preceding week when seasonal factors are excluded from the index calculation.
The Mortgage Bankers Association
reported the index as part of its Weekly Mortgage Applications Survey, which reportedly covers more than three-quarters of all applications.
Refinance applications jumped 11 percent from the week ended May 12. The strong increase came as the average contract interest rate for conforming 30-year fixed-rate loans fell to the lowest level since November 2016.
At the same time, refinance share widened to 43.9 percent from 41.1 percent. But refinance share was significantly more narrow than 53.7 percent the same week last year.
A seasonally adjusted 1 percent decline from the last report was recorded for purchase-money mortgage applications. But without seasonal adjustments, purchase applications were down 2 percent and up 3 percent from the week ended May 20, 2016.
At 10.8 percent, the share of applications that were for loans insured by the Federal Housing Administration was more broad than 10.6 in the previous report but not as wide as 12.7 percent a year previous.
Applications for mortgages guaranteed by the Department of Veterans Affairs made up 10.5 percent of applications, less than the 10.7 percent VA share in the last report
and 11.5 percent in the same week a year ago.
Applications for adjustable-rate mortgages accounted for 8.2 percent of overall activity. ARM share widened from
8.1 percent a week earlier and 5.7 percent a year earlier.
Interest rates on jumbo mortgages were 6 basis points less than conforming rates. The jumbo-conforming spread widened from zero a week prior
and a negative 3 BPS a year prior.
