Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 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 3, 2024. 

The Market Composite Index, a measure of mortgage loan application volume, increased 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index increased 5 percent from the previous week and was 6 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 17 percent lower than the same week one year ago.

“Treasury rates and mortgage rates fell last week on the news of a slowing job market, with wage growth at the slowest pace since 2021, and the Federal Reserve’s announced plans to ease quantitative tightening in June and to maintain its view that another rate hike is unlikely. The conventional 30-year rate dropped 11 basis points, and the FHA rate fell 17 basis points to 6.92 percent, back below 7% for the first time in three weeks,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Mortgage applications increased for the first time in three weeks, with refinances up 5 percent. Even with the increase, which included a 29 percent jump in VA refinances, refinance volume remains about 6 percent below last year’s already low levels.”

Added Fratantoni, “Driven by a 5 percent gain in FHA applications, purchase activity was up 2 percent. First-time homebuyers account for roughly half of purchase loans, and the government lending programs are an important source of financing for these homebuyers. The gain in FHA activity is a sign that this segment of the market is active.”

The refinance share of mortgage activity increased to 30.6 percent of total applications from 30.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.7 percent of total applications.

The FHA share of total applications increased to 12.9 percent from 12.7 percent the week prior. The VA share of total applications increased to 11.7 percent from 11.3 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.18 percent from 7.29 percent, with points unchanged at 0.65 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) decreased to 7.31 percent from 7.39 percent, with points unchanged at 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.  

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.92 percent from 7.09 percent, with points decreasing to 0.91 from 0.98 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.60 percent from 6.74 percent, with points decreasing to 0.59 from 0.63 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs remained unchanged at 6.60 percent, with points decreasing to 0.65 from 0.75 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week. 

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.

Contact:

Falen Taylor – Media Contact – ftaylor@mba.org – (202) 557-2771

Source: Mortgage Bankers Association