Purchase mortgage applications are still on a roll

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Mortgage applications increased 2.7% from one week earlier, as purchase volume is now outpacing the prior year's activity, according to the Mortgage Bankers Association.

However, refinance volume continues to lag. The MBA's Weekly Mortgage Applications Survey for the week ending May 22 found that the refinance index decreased 0.2% from the previous week. The refinance share of mortgage activity decreased to 62.6% of total applications from 64.3% the previous week.

"The home purchase market continued its path to recovery as various states reopen, leading to more buyers resuming their home search," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "Purchase applications increased 9% last week — the sixth consecutive weekly increase and a jump of 54% since early April. Additionally, the purchase loan amount has increased steadily in recent weeks and is now at its highest level since mid-March."

The average purchase loan size for this week was $340,200, with the average for all loan types was $314,900. For the week ended May 15, the average for purchase loans was $330,700 and for all loans it was $310,600.

On an unadjusted basis, purchase volume was up 7% from the previous week and by 9% over the same week in 2019.

"Despite mortgage rates hovering near MBA's all-time survey low, refinance activity was essentially flat but still 176% higher than last year. Conventional refinance applications increased 2%, while government refinancing was down almost 7%," Kan said.

Adjustable-rate mortgage activity increased to 3.4% from 3.2% of total applications, while the share of Federal Housing Administration-insured loan applications decreased to 11.2% from 11.5% the week prior.

The share of applications for Veterans Affairs-guaranteed loans decreased to 12.4% from 13.4% and the U.S. Department of Agriculture/Rural Development share decreased to 0.6% from 0.7% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased 1 basis point to 3.42%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400), the average contract rate increased 5 basis points to 3.71%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 5 basis points to 3.41%. For 15-year fixed-rate mortgages, the average decreased 1 basis point to 2.87%. The average contract interest rate for 5/1 ARMs decreased to 3.08% from 3.19%.

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