Home purchase applications declined to their lowest level in 13 years last month, while refinance applications increased. The Mortgage Bankers Association attributes this to the recent tax credit expiration which shifted May sales into April. The following article from HousingWire has more on this.
The change in mortgage applications this week was mixed in two surveys.
A 14.5% jump in the volume of applications submitted for refinance partially offset the 27.1% plummet in applications submitted for purchase mortgages, according to the Mortgage Bankers Association (MBA).
It marks the lowest level of purchase applications in 13 years — since May 1997 — bringing gross applications down 1.5% this week, MBA said.
“Purchase applications … declined almost 20% over the past month, despite relatively low interest rates,” said MBA vice president of research and economics Michael Fratantoni. “The data continue to suggest that the [first-time homebuyer] tax credit pulled sales into April at the expense of the remainder of the spring buying season.”
Fratantoni added: “However, refinance borrowers did react to [recent] lower rates, with refi applications … hitting their highest level in nine weeks.”
The refinance share of mortgage applications rose to 68.1%, from 57.7% last week, MBA said. Additionally, the adjustable-rate mortgage share of activity remained constant at 6.3% of total applications.
The Mortgage Maxx index, which adjusts data to reflect the number of households applying for a mortgage, rose 4.9% in the same week. This lift in household activity over last week could be “only a seasonal bias,” according to the Mortgage Maxx.
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