Home Purchase Financing Applications Climb

The number of prospective mortgage borrowers who applied for a new home loan in the week ended May 20 increased by 2 percent from a week earlier.

That seasonally adjusted metric was according to the Market Composite Index. The index reportedly is a measure of mortgage loan application volume.

The index is included in the
Weekly Mortgage Applications Survey from the Mortgage Bankers Association. The trade group says the survey covers over 75 percent of all U.S. retail residential mortgage applications.

Foregoing any adjustments for seasonality, the index
was still up 2 percent.

There was barely any week-over-week change in the volume of refinance applications, which accounted for 53.7 percent of all applications. Refinance share declined from 54.6 percent in the week ended May 13
but was wider than 51 percent in the same week last year.

Applications for purchase financing
accelerated by a seasonally adjusted 5 percent from one week previous, while without seasonal adjustments — purchase activity was up 4 percent from a week earlier and 17 percent from a year earlier.

MBA’s report indicated that 12.7 percent of all applications were for mortgages insured by the Federal Housing Administration. FHA share was greater than 12.5 percent the last report.

Applications for loans guaranteed by the Department of Veterans Affairs represented 11.5 percent of overall activity. VA share was thinner than 12.1 percent the previous week.

The trade group’s report indicated that interest rates on jumbo mortgages were
3 basis points less than rate on conforming loans. The jumbo-conforming spread fell from a negative 8 BPS a week prior but widened from a negative 1 basis point a year prior.