Prospective mortgage borrowers turned their attention away from home financing to Mothers Day as refinance applications led a drop in overall activity.
For the week ended May 12, the Market Composite Index — a measure of mortgage application volume — declined a seasonally adjusted 4 percent from a week earlier.
Even when there are no seasonal adjustments made,
new U.S. residential lending applications were still down 4 percent from the week that ended on May 5.
The Market Composite Index is derived from the
Weekly Mortgage Applications Survey, which was published Wednesday by the Mortgage Bankers Association. The survey reportedly covers more than three-quarters of all retail residential loan applications.
A 6 percent decline from the preceding report was recorded for refinance applications. Refinance share of total applications was 41.1 percent — the thinnest share since September 2008.
The share was 41.9 percent in the report from seven days earlier and 54.7 percent the same week a year ago.
Just a seasonally adjusted 3 percent week-over-week decline was recorded for applications for loans to finance a home purchase. A 3 percent drop was also calculated without seasonal adjustments, while the unadjusted purchase index ascended 9 percent from the week ended May 13, 2016.
Applications for mortgages insured by the Federal Housing Administration accounted for 10.6 percent of the week’s total. FHA share thickened from 10.5 percent a week earlier but was cut from 12.6 percent a year earlier.
Another 10.7 percent of weekly activity was for loans guaranteed by the Department of Veterans Affairs. VA share was more narrow than 10.8 percent in the last report
and thinner than 12.2 percent in the report from a year prior.
MBA reported that applications for adjustable-rate mortgages accounted for 8.1 percent of total activity. ARM share was more narrow than
8.2 percent in the previous report. But ARM share has widened from the same week last year, when it was 5.5 percent.
Interest rates on jumbo mortgages were the same as their conforming counterparts. The jumbo-conforming spread narrowed from a negative basis point the previous week and a negative 8 BPS a year previous.
