Mortgage applications down more than 4% last week

There was a decrease in mortgage applications in the week ending April 26 compared to the previous week.

The Mortgage Bankers Association’s Market Composite Index shows a 4.3% decline on a seasonally adjusted basis and a 4% decline on an unadjusted basis.

There was a 5% decrease in the Refinance Index while the Purchase Index was down 4% seasonally adjusted and 3% unadjusted (but 1% higher than a year ago.)

"Mortgage rates were lower last week - with the 30-year fixed rate declining to 4.42% - as concerns over global growth, particularly in Germany, outweighed more positive domestic news on first quarter GDP growth and business investment," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Applications to refinance and purchase a home both fell, but purchase activity still remained slightly above year ago levels. The drop in refinances were driven by fewer FHA and VA loan applications, which typically lag the movement of conventional loans."

The share of applications that were for refinances fell to 38.8% of total applications (39.4% a week earlier) and the ARM share of activity decreased to 6.2% of total applications, its lowest share since August 2018.

“So far in 2019, we continue to see a preference for 7/1 ARMs, which account for around 36 percent of all ARM applications, followed by 10/1 and 5/1 ARMs,” added Kan. “This is another indication that the few borrowers who choose to apply for ARM loans are electing to reap the benefit of lower rates, as well as some rate stability."

The FHA share of total applications decreased to 9.5% (from 9.9%); the VA share decreased to 10.9% (from 11.3%); the USDA share remained unchanged at 0.6%.