Spring, typically a time when home buyers are in nesting mode, saw mortgage applications decrease 7.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 19.
The Market Composite Index, a measure of mortgage loan application volume, decreased 7.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 11 percent from the previous week, and the seasonally adjusted Purchase Index decreased four percent for the same time. The unadjusted Purchase Index decreased three percent compared with the previous week and was three percent higher than the same week one year ago.
The 30-year fixed mortgage rate has risen 10 basis points in three weeks, and is now at its highest level in more than a month. Borrowers remain extremely sensitive to rate changes, which is why there has been a 28 percent drop in refinance applications over this three-week period. Purchase activity also declined, but remains almost three percent higher than a year ago.
The strong economy and job market is keeping buyer interest high, but rising mortgage rates could add pressure to the budgets of some would-be buyers.
The survey covers more than 75 percent of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.