While mortgage rates declined to their lowest levels in the Mortgage Bankers Association's (MBA) survey history for the week ending April 20, refinancing activity did not see a corresponding increase.
In fact the Refinance Index declined 5.6% to ~3716 after surging 13.5% the prior week, while the refinance share of mortgage activity as a percent of total applications lowered to 73.4% from 75.2%. Since part of the reason for the prior week's jump was related to no seasonal adjustment for the Good Friday holiday, there was some expectation the index would ease back.
Delving more into the refinance components, the MBA reported that the Conventional Refinance Index dropped 6.1%, while the Government Refinance Index slipped 2.1%.
According to the weekly report, the contract interest rate for 30-year fixed conforming loans averaged a record low 4.04%, down one basis point from the previous report. Federal Housing Administration rates also moved to a new low of 3.81% from 3.83%.
The Purchase Index recorded a modest response to historic lows, increasing 2.7% to ~186 after falling over 11% in the week ending April 13. Overall, mortgage application activity was down 3.8%.