Overall mortgage application activity slipped 1.5% in the week ending May 14 as gains in refinancing were more than offset by a plunge in purchases. 

According to the Mortgage Bankers Association (MBA), the Refinance Index surged 14.5% to ~2784 as a result of further declines in mortgage rates.  The index is at its highest level since mid-March.

The organization reported the average contract interest rate for 30-year mortgages dropped 13 basis points to 4.83% — its lowest level since last November. 

As a percent of total applications, refinancing share jumped to 68.1% from 57.7% in the previous week. 

Meanwhile, the Purchase Index plunged 27.1% to ~193 in response to the expiration of the homebuyers tax credit at the end of April. 

"The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season," said Michael Fratantoni, MBA's vice president of research and economics. 

So far in May, refinancing activity is up over 30% as mortgage rates dropped through 5%. 

Currently, speeds are projected to increase around 10% in June (reported in July) for 30-year FHLMC Golds and GNMAs, primarily in response to a higher number of collection days: 23 versus 20 in May. 

Recent gains in refinancing activity could result in some upward revisions in coming weeks if activity remains elevated. 

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