Mortgage applications climbed for a
The association’s Market Composite Index, which tracks the volume of mortgage applications based on its survey of lenders, rose a seasonally adjusted 1.2% from the previous week for the week ending May 14. The unadjusted increase came in at 1%. Total application volume showed a 0.4% decrease compared to the same period one year ago.
The MBA’s Refinance Index jumped 4% from a week earlier, but was down 2% from its level at the same time in 2020. The increase in weekly refinancing activity offset a downturn in purchase loans, with the Purchase Index posting a 4% drop on both a seasonally adjusted, as well as an unadjusted basis. Unadjusted purchase volume was 2% higher from the same week a year ago.
Although average interest rates climbed, they didn’t deter borrowers trying to refinance, who helped spur the overall composite index to a net-positive weekly gain. The refinance share of total application volume increased to 63.3%, up from 61.3% one week earlier.
“Ongoing volatility in refinance applications is likely if rates continue to oscillate around current levels,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
The share of mortgages backed by the Federal Housing Authority declined to 9.2% from 9.9% one week earlier, while Veterans Administration-guaranteed loans increased to 12% from 11.7%. Loans insured by the U.S. Department of Agriculture fell to 0.4% from 0.5% week over week.
The share of adjustable-rate mortgages increased to 3.9%, up from 3.8% the previous week.
Average size of mortgage loan continues to grow
While application volume was down for both conventional and government-sponsored purchases, the average size of purchase mortgages grew, reflecting
“There continues to be strong demand for buying a home, but persistent supply shortages are constraining purchase activity, and building material shortages and higher costs are making it more difficult to increase supply. As a result, home prices and average purchase loan balances continue to rise,” Kan said.
Average mortgage size climbed to $338,500 compared to $337,700 the previous week, thanks to increases in both purchase and refinancing amounts. The average purchase-mortgage size rose to $411,400 from $409,800, while for refinancing, the average moved up to $296,100 from $292,300 a week earlier.
Rates up across the board
The average contract interest rate of 30-year fixed-rate mortgages with conforming loan balances of $548,250 or less moved back up to 3.15% after falling to 3.11% the previous week. Jumbo loans with higher balances also saw their average rate increase to 3.31% from 3.27%.
For loans backed by the FHA, the 30-year fixed-rate-mortgage contract average rose to 3.13% from 3.07% the prior week,
The average contract interest rate of 15-year fixed-rate mortgages also increased week over week to 2.54% from 2.49%, while the contract interest rate average of 5/1 adjustable-rate mortgages inched up to 2.58% from 2.57% a week earlier.
