Mortgage applications increased 0.3% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending May 8, 2020.
The Market Composite Index, a measure of mortgage loan application volume, increased 0.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1% compared with the previous week. The Refinance Index decreased 3% from the previous week and was 201% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 11% from one week earlier. The unadjusted Purchase Index increased 11% compared with the previous week and was 10% lower than the same week one year ago.
“There continues to be a stark recovery in purchase applications, as most large states saw increases in activity last week. In the ten largest states in MBA’s survey, New York – after a 9% gain two weeks ago – led the increases with a 14% jump. Illinois, Florida, Georgia, California and North Carolina also had double-digit increases last week,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “We expect this positive purchase trend to continue – at varying rates across the country – as states gradually loosen social distancing measures, and some of the pent-up demand for housing returns in what is typically the final weeks of the spring home buying season.”
Added Kan, “Mortgage rates stayed close to record-lows, but refinance applications decreased for the fourth consecutive week, driven by a 5% drop in conventional refinances. Despite the downward trend over the last month, mortgage lenders remain busy. Refinance activity was up 200% from a year ago.”
The refinance share of mortgage activity decreased to 67.0% of total applications from 70.0% the previous week. The adjustable-rate mortgage share of activity decreased to 2.9% of total applications.
Looking at the impact at the state level, here are results showing the non-seasonally adjusted, week-over- week% change in the number of purchase applications from Washington, California and New York:
The FHA share of total applications increased to 11.5% from 11.1% the week prior. The VA share of total applications increased to 13.7% from 13.3% the week prior. The USDA share of total applications increased to 0.6% from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.43% from 3.40%, with points decreasing to 0.29 from 0.30 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) remained unchanged at 3.69%, with points decreasing to 0.33 from 0.34 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.37%, with points increasing to 0.21 from 0.20 (including the origination fee) for 80% LTV loans. The effective rate remained unchanged from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.92% from 2.93%, with points decreasing to 0.28 from 0.29 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.26% from 3.20%, with points decreasing to 0.04 from 0.36 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
