Mortgage application activity weakened during the week ending April 25, according to data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 4.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index was down by an even 4%.
The seasonally adjusted Purchase Index was down by 4% from one week earlier while the unadjusted index fell 3% – the latter was also 3% higher than the same week one year ago. The Refinance Index was also down by 4%, although it was 42% higher than the same week one year ago, and the refinance share of mortgage activity remained unchanged at 37.3% of total applications from the previous week.
Among the federal programs, the FHA share of total applications remained unchanged at 16.7% from the week prior while the VA share of total applications decreased to 13.1% from 13.4% and the USDA share of total applications increased to 0.6% from 0.4%.
Joel Kan, MBA’s vice president and deputy chief economist, observed, “Even with the spring homebuying season underway, purchase applications decreased, as conventional and VA applications saw declines of 6% and 4%, respectively. With slowly increasing housing inventory in many markets and first-time homebuyers still in the mix, FHA purchase applications fared better with only a slight decline. Overall purchase applications continue to run ahead of last year’s pace. Refinance activity dipped again, as mortgage rates remained close to 7%, and borrowers hold out for a bigger decline in rates. Given the pullback in refinancing, the average loan size for refinances declined to just under $290,000, the lowest level in three months.”
