After falling 2.3% the previous week, mortgage application volume fell 4.6% on an adjusted basis during the week ended May 1, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, volume fell 4% compared with the previous week. Applications for refinances fell 8% on higher rates while applications for purchases increased 1%.
On an unadjusted basis applications for purchases increased 2% compared with the previous week and were 12 percent higher than the same week one year ago.
Mike Fratantoni, chief economist for the MBA, explains that most of the drop was due to the increase in mortgage rates that came during the week.
‘Refinance volume dropped last week as rates in the U.S. increased sharply towards the end of the week, with signs of recovery in Europe lifting rates across the globe,’ Fratantoni says in a release. ‘Purchase activity increased slightly â�¦ and the average loan amount for a purchase application reached a record high, a sign that the mix of purchase activity is still skewed toward higher priced homes.’
The refinance share of mortgage activity decreased to 53% of total applications from 55% the previous week.
The average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 3.93%, up from 3.85% the previous week.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 3.91%, up from 3.82% the previous week.
The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) was 3.70%, up from 3.66%.
The average rate for a 15-year FRM was 3.19%, up from 3.14% the week prior.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 2.87%, down slightly from 2.88%.
The ARM share of activity increased to 6.1% of total applications. The average loan size for purchase applications rose to a survey high of $297,400.
Looking at volume by loan type, applications for mortgages backed by the FHA represented 14.0% of all applications, up from 13.7% the previous week. Applications for Veterans Affairs mortgages represented 11.9% of all loans, up from 11.3% the previous week. Applications for mortgages through the U.S. Department of Agriculture were unchanged at 0.8%.
All rates are based on closings. The survey covers over 75% of all U.S. retail residential mortgage applications.