The Mortgage Bankers Association (MBA) reported mortgage applications declined 5.7 percent for the week ending May 12, compared with one week prior.
According to MBA’s Market Composite Index, a measure of mortgage loan application volume, mortgage application volume decreased 5.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 43 percent lower than the same week one year ago.
“Mortgage rates increased last week even as Treasury yields were essentially flat, with the spread between the two rates widening to 310 basis points. Mortgage application activity slowed, as most mortgage rates in the survey increased, with the 30-year fixed rate jumping nine basis points to its highest level in two months at 6.57 percent,” MBA Vice President and Deputy Chief Economist Joel Kan said. “Purchase applications decreased 5 percent to its slowest pace in a month, as buyers remain wary of this rate volatility, but also as for-sale inventory in many parts of the country remains scarce.”
The refinance share of mortgage activity decreased to 27.4 percent of total applications from 28 percent the previous week. The adjustable-rate mortgage share of activity decreased to 6.5 percent of total applications.
“Refinance applications accounted for 27 percent of all applications and dropped almost 8 percent last week,” Kan added. “Most borrowers have lower rates on their mortgages, and those who are in the market are extremely rate sensitive.”