Mortgage application activity slowed during the week ending May 1, according to data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 4.4% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index was down by 4%.
The seasonally adjusted Purchase Index decreased 4% from one week earlier while the unadjusted index stumbled by 3% – the latter was also 5% higher than the same week one year ago. The Refinance Index decreased 5% from the previous week and was 29% higher than the same week one year ago while the refinance share of mortgage activity dipped to 42.0% of total applications from 42.5% during the previous week.
Among the federal programs, the FHA share of total applications increased to 17.7% from 17.2% the week prior while the VA share of total applications slid to 14.9% from 15.0% and the USDA share of total applications remained unchanged at 0.5%.
Joel Kan, MBA’s vice president and deputy chief economist, observed. “Despite purchase applications declining over the week, overall activity remains higher compared to last year’s pace. Additionally, the average loan size on a purchase application increased to $467,300, the highest in the survey’s history dating back to 1990. This increase could indicate that potential first-time buyers, and buyers looking for homes at lower price points, might be the most hesitant to move forward given the economic uncertainty and higher rates.”
Separately, the National Association of Realtors (NAR) published data that found home prices rose in 71% of metro markets (167 out of 235) during the first quarter of the year. This is down from 73% in the fourth quarter. Double-digit gains were recorded in 7% of metro areas (16 out of 235), up from 5% in the prior quarter
The national median single-family existing-home price rose 0.5% year-over-year to $404,300 in the first quarter, down from 1.2% annual growth in the fourth quarter.
“Home prices continued to increase in many markets, boosting housing wealth for most homeowners,” said NAR Chief Economist Lawrence Yun. “Gains were particularly solid across metro areas in the Northeast, where inventory shortages persist, and in the Midwest, where home prices remain relatively affordable. However, the expensive West region did not see an increase in sales. The condominium market, which weakened sharply last year, is showing signs of stabilization and, in some metro areas, even outperforming the single-family market in terms of price gains. Improved affordability is drawing buyers back to the condo market.”
“Even though mortgage rates are higher than earlier this year, rates remain comfortably below last year’s levels,” Yun continued. “Lower mortgage rates will allow more potential buyers to qualify for and obtain a mortgage.”
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