Mortgage applications in the United States increased as mortgage rate continued its downward pattern, according to a report from the Mortgage Bankers Association (MBA) on Wednesday.
For the week ending May 17, MBA’s market composite index, a measure of mortgage loan application volume, rose 2.4 percent from a week earlier.
However, MBA’s purchase index before seasonally adjustment dropped 3 percent from the previous week. After removing the influences of predictable seasonal patterns, the seasonally adjusted purchase index dropped 2 percent from one week earlier, according to MBA.
“Purchase activity declined again, but remained around 7 percent higher than a year ago,” said Joel Kan, associate vice president of economic and industry forecasting of MBA.
“Mortgage rates fell for the fourth straight week, with the 30-year fixed rate mortgage hitting its lowest level since January 2018, leading to a rebound in refinances,” said Kan.
The refinance index, which measures the activity to replace higher rate mortgages with lower rate mortgages, increased 8 percent from the previous week.
“The refinance index increased 8 percent to its highest level in over a month, and once again there was an increase in average refinance loan sizes, as borrowers with larger balances responded accordingly to lower rates,” said Kan.
“We’re keeping a close eye on whether there may be some adverse effects of the ongoing global trade disputes on overall demand,” Kan said.”Some potential homebuyers may be delaying their home search until there’s more certainty.”