Refinancing helped fuel an increase in mortgage application activity for the week ending May 17, according to new data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, increased 1.9% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index increased 1.1% compared with the previous week.
The seasonally adjusted Purchase Index dipped by 1% from one week earlier while the unadjusted index dropped by 2% – the latter was also 11% lower than the same week one year ago.
The Refinance Index increased 7% from the previous week and was 21% higher than the same week one year ago. The refinance share of mortgage activity increased to 34% of total applications from 32% the previous week.
“VA refinances had a double-digit increase for the third consecutive week, although the current level of refinancing is still well below its historical average,” said Joel Kan, MBA’s vice president and deputy chief economist. “Purchase activity continues to lag despite this recent decline in rates, down 11% from a year ago, as potential buyers still face limited for-sale inventory and high list prices.”
Among the federal programs, the FHA share of total applications increased to 12.8% from 12.4% the week prior while the VA share of total applications rose to 13.7% from 12.7% and the USDA share of total applications decreased to 0.3% from 0.4% the week prior.
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