Mortgage Applications Bounce Back for Week Ending May 3

MBA Weekly Mortgage Applications Survey Composite +2.7%, Purchase Index Rises a Solid +4.0%

The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey bounced back for the week ending May 3 after consecutive declines in late April.

The Composite Index rose 2.7% after slipping 4.3% the week prior. The Purchase Index gained a solid 4%, increasing the year-on-year growth rate from just 1% in the prior week to 5%. The Refinance Index, which fell throughout most of April, kicked off May with a a 1.0% gain.

“We saw a good week for the spring homebuying season, as a 5 percent increase in purchase applications – both weekly and year-over-year – drove the results,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Average loan amounts also stayed elevated, with government purchase applications rising to the highest in the survey.”

“Even with slower price appreciation in higher-priced markets, home prices are still rising enough to push average loan sizes higher.”

The refinance share of mortgage activity fell to 37.9% of total applications from 38.8% the prior week. The adjustable-rate mortgage (ARM) share of activity rose to 6.4%.

The Federal Housing Administration (FHA) share remained unchanged at 9.5%, while the Veterans Affairs (VA) share rose slightly to 11.1% from 10.9%. The Department of Agriculture (USDA) share also remained unchanged at 0.6%.