As mortgage loan originators completed fewer applications last week, the share of activity that was for a government mortgage fell to the lowest level in seven months.
Prospective borrowers applied for a new home loan during the week ended May 25 at a seasonally adjusted pace that was 3 percent slower than one week earlier.
Application volume, which is based on the Market Composite Index, moved down 4 percent when seasonal factors are not considered.
The index was determined based on the Weekly Mortgage Applications Survey, which was reported Wednesday by the Mortgage Bankers Association. The trade group claims that more than three-quarters of all applications are covered by the survey.
A 5 percent decline was recorded for refinance applications — which stood at their lowest level since December 2000. Refinance share of 35.3 percent was the thinnest it’s been since it was 34 percent in the week ended Aug. 29, 2008. Refinance share was 35.7 percent in last week’s report and 43.2 percent in the same week last year.
Purchase financing applications declined a seasonally adjusted 2 percent. Purchase activity fell 3 percent without seasonal adjustments, though it was up 2 percent from the same seven-day period in 2017.
People seeking loans insured by the Federal Housing Administration made up 9.9 percent of all applications. FHA share was more narrow than 10.3 percent a week earlier and 10.5 percent a year earlier.
Another
9.9 percent of applications were for mortgages guaranteed by the Department of Veterans Affairs. In the previous report, VA share was 9.8 percent, while it was 10.8 percent a year previous.
Including USDA applications, government share was 20.6 percent — the thinnest it’s been since it was also 20.6 percent in the week ended Oct. 20, 2017.
Applications for adjustable rate mortgages made up 6.7 percent of all activity, decreasing from 6.8 percent the preceding week and 7.7 percent in the week ended May 26.
Interest rates on jumbo
mortgages were 11 basis points lower than conforming rates. The spread ballooned from 5 BPS in last week’s report and 6 BPS the same week in 2017.
