For the first time since 2009, the majority of loan applications across the country were for purchase mortgages, with the share of refinance applications declining to 49 percent of total applications this week, according to the Mortgage Bankers Association (MBA). Overall, mortgage applications increased 5.3 percent from one week earlier according to the MBA’s weekly survey for the first week of May.

The MBA’s market composite index, a measure of mortgage loan application volume, increased 5.3 percent on a seasonally adjusted basis from one week earlier and 6 percent on an unadjusted basis compared with the previous week. The refinance index increased 2 percent from the previous week. 

"It is official: we are in a majority purchase market for the first time since 2009," Mike Fratantoni, MBA’s chief economist, said in a statement. "A sizeable increase in purchase applications last week likely reflected the impact of somewhat lower mortgage rates, as well as continued growth in the job market, as confirmed by Friday’s employment report from the BLS. Despite the strong increase in the purchase market last week, volume continues to run behind last year’s pace."

The seasonally adjusted purchase index increased 9 percent from one week earlier to the highest level since January 2014. The unadjusted purchase index increased 10 percent compared with the previous week, but was 16 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 49 percent of total applications from 50 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.43 percent, the lowest rate since November 2013, from 4.49 percent, for 80 percent loan-to-value ratio (LTV) loans. 

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.29 percent, the lowest rate since June 2013, from 4.37 percent for 80 percent LTV loans.

The average interest rate for 30-year fixed-rate FHA mortgages decreased to 4.13 percent from 4.17 percent.

The average interest rate for 15-year fixed-rate mortgages decreased to 3.52 percent from 3.53 percent.

The average interest rate for 5/1 ARMs decreased to 3.21 percent from 3.26 percent for 80 percent LTV loans.

MBA: Majority Of U.S. Loan Applications Are For Purchase

by Banker & Tradesman time to read: 1 min
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