MBA: Purchase Application Volume Rose 9% Last Week

Posted by Patrick Barnard on May 07, 2014 No Comments
Categories : Residential Mortgage

The housing finance industry officially crossed into a majority purchase market last week, as an impressive 9% increase in purchase application volume pushed the refinance share of mortgage activity to 49% of total applications – down from 50% the previous week – according to the Mortgage Bankers Association (MBA).

‘It is official: We are in a majority purchase market for the first time since 2009,’ proclaims Mike Fratantoni, chief economist for the MBA, in a statement. ‘A sizeable increase in purchase applications last week likely reflected the impact of somewhat lower mortgage rates, as well as continued growth in the job market, as confirmed by Friday's employment report from the Bureau of Labor Statistics.’

Total mortgage application volume increased 5.3%, on an adjusted basis, during the week ending May 2, compared to the previous week. On an unadjusted basis, volume was up around 6%.

Of significance is that purchase application volume was up 9%, on an adjusted basis, from one week earlier to reach the highest level since January. This could be a sign that the spring home shopping season is finally starting to bud, after a long, harsh winter.

On an unadjusted basis, purchase application volume was up 10% compared with the previous week but was 16% lower than the same week one year ago, according to the report.

Refinances were up 2% compared to the previous week, mainly due to the fact that fixed mortgage rates dipped slightly compared to the previous week.

For the week ending May 2, the average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 4.43%, down from 4.49% the previous week.

The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 4.29%, down from 4.37% the week prior.

The average rate for a 30-year FRM backed by the Federal Housing Administration was 4.13%, down from 4.17% the previous week.

The average rate for a 15-year FRM decreased to 3.52% from 3.53%.

The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.21%, down from 3.26% the week prior. The ARM share of activity increased to 9% of total applications.

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