Mortgage application activity fell 11.1% overall in response to the recent sharp increase in mortgage rates that brought the 30-year fixed rate to 6.03% from 5.88%. The Mortgage Bankers Association reported that the Refinance Index dropped 16.7% to 1905.2 for the week ending April 25.
In the past two reports, the index has plummeted 34%. The Index stands at its lowest level since the last week of December when it slowed to 1621 as a result of the holidays. A year ago the Refinance Index stood at 2016 with the 30-year fixed mortgage rate averaging 6.16%.
The slowing in activity is likely to start showing up in the May and probably more fully in the June prepayment reports. Current expectations had speeds slightly faster, but the slowing is expected to revise estimates lower.
The Purchase Index declined 4.8% to 340.1, which is the lowest it's been since February 2003. The report noted that the Conventional Purchase Index decreased 5.2%, while the Government Index (largely FHA) slipped 3.7%.
The MBA reported a slight improvement in mortgage rates with the 30-year fixed contract rate averaging 6.01% versus 6.04% previously. The one-year ARM rate fell seven basis points to 6.86%.
As a percent of total applications, refinancing share was 45.7%, down from 49.2%, and is at similar levels to last October. ARM share was also lower to 5.9% from 6.5%.