Mortgage application activity slumped during the week ending May 24, according to the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, dropped by 5.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index was down by 6.3% compared with the previous week.
The seasonally adjusted Purchase Index dipped by 1% from one week earlier while the unadjusted index fell by 3% compared with the previous week – the latter was also 10% lower than the same week one year ago.
The Refinance Index decreased 14% from the previous week and was 12% higher than the same week one year ago. The refinance share of mortgage activity shrank to 31.3% of total applications from 34.0% the previous week.
Among the federal programs, the FHA share of total applications decreased to 12.7% from 12.8% the week prior while the VA share of total applications decreased to 12.0% from 13.7% and the USDA share of total applications increased to 0.4% from 0.3%.
Joel Kan, MBA’s vice president and deputy chief economist, observed, “Both purchase and refinance applications fell, pushing overall activity to the lowest level since early March. Borrowers remain sensitive to small increases in rates, impacting the refinance market and keeping purchase applications below last year’s levels. There continues to be limited levels of existing homes for sale and many buyers are struggling to find listings in their price range that meet their needs.”
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