From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey
Mortgage applications decreased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 15, 2020.
… The Refinance Index decreased 6 percent from the previous week and was 160 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 1.5 percent lower than the same week one year ago.
…
“Applications for home purchases continue to recover from April’s sizeable drop and have now increased for five consecutive weeks. Purchase activity – which was 35 percent below year-ago levels six weeks ago – increased across all loan types and was only 1.5 percent lower than last year,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months. As states gradually re-open and both home buyer and seller activity increases, we will be closely watching to see if these positive trends continue, or if they reflect shorter-term, pent-up demand.”Added Kan, “Despite mortgage rates remaining close to record-lows, refinance activity slid to its lowest level in over a month. The average loan amount for refinances fell to its lowest level since January – potentially a sign that part of the drop was attributable to a retreat in cash-out refinance lending as credit conditions tighten. We still expect a strong pace of refinancing for the remainder of the year because of low mortgage rates. With many homeowners still facing economic and employment uncertainty, these refinance opportunities will allow them to save money on their monthly payments, which can then be used to help other areas of their budgets.”
…
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.41 percent from 3.43 percent, with points increasing to 0.33 from 0.29 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Click on graph for larger image.
The first graph shows the refinance index since 1990.
The refinance index has been very volatile recently depending on rates and liquidity.
But the index is way up from last year (over triple last year).
The second graph shows the MBA mortgage purchase index
According to the MBA, purchase activity is down 1.5% year-over-year.
Note: Red is a four-week average (blue is weekly).