Drop in Mortgage Applications Due to Lower Refinance Activity

The volume of mortgage applications declined in the week ending April 24th compared to the previous week, according to the Mortgage Bankers Association. On a seasonally adjusted basis, the week-over-week decrease in the Market Composite Index was 2.3%. This is by how much the volume of applications had risen in the week before. On a seasonally unadjusted basis, the drop in the Index was 2%.

The volume of applications for mortgage refinance had a downward impact on the total volume of applications in the week ended April 24th. MBA’s Refinance Index went down by 4% from the previous week. The share of mortgage refinance applications in the total volume of applications decreased as well. It shrunk to 55% from 56% in the week ended April 17th. With this decline, the share of refinance activity reached its lowest share since September 2014.
The volume of applications for home purchase loans did not experience any significant changes during the week. The seasonally adjusted Index for purchase applications was at the same level as in the week before. The seasonally unadjusted Index underwent an increase of 1 percentage point on a week-over-week basis. Despite the very modest rise, it was 21% higher compared to the same time one year earlier.

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Two of the three types of government-guaranteed mortgage loans experience increase in application share during the week. The share of applications for FHA loans rose to 13.7% from 13.6% in the previous week. The share of applications for VA loans went up to 11.3% from 11.0% one week earlier. The share of USDA loan applications remained unchanged from the week before. It was 0.8%.

The average contract rates of mortgages with conforming balances and fixed rates underwent small increases in the week ended April 24th. The average contract rate of a 30-year fixed-rate loan with conforming balance rose to 3.85% from 3.83% in the week before.



Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info

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