Mortgage Applications Drop on Depressed Refinance Activity

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Mortgage application activity fell once again as refinance volume dropped to its lowest level since September 2014, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.

There was a 2.3% decline in application volume on a seasonally adjusted basis for the period ending April 24. The seasonally adjusted purchase index remained unchanged, while the refinance index plunged 4% during the same time span.

Overall, the refinance share of mortgage activity fell to its lowest level since last September at 55%.

Other mortgage types saw gains, however. The FHA share of total applications increased to 13.7% from 13.6% a week prior, while the VA share lifted to 11.3% from 11% during the same period.

Adjustable-rate mortgages also grew their share of total activity to 5.7%, but the USDA share yet again remained steady at 0.8%.

As for interest rates, the results for the week were more of a mixed bag. The contract interest rate for 30-year fixed mortgages with a balance above $417,000 dropped one basis point to 3.82% from 3.83%. The average contract interest rate for 5/1 adjustable-rate mortgages also decreased by one basis point to 2.88%.

Otherwise though, interest rates rose modestly. For 30-year fixed conforming mortgages below $417,000 the average interest rate increased two basis points to 3.85%. The average interest rate for 30-year fixed-rate mortgages backed by the FHA rose by one basis point to 3.65% and the average rate for 15-year fixed-rate mortgages grew to 3.14% from 3.11%.

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