Mortgage Application Activity Rebounds with 11% Upswing

Mortgage application activity picked up with new gusto for the week ending May 2, according to data from the Mortgage Bankers Association (MBA).

The Market Composite Index, the MBA’s measure of mortgage loan application volume, increased 11% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index was up by 12%.

The seasonally adjusted Purchase Index increased 11% from one week earlier while the unadjusted index was 12% higher – the latter was also 13% higher than the same week one year ago. The Refinance Index increased 11% from the previous week and was also 51% higher than the same week one year ago, although the refinance share of mortgage activity dipped slightly to 37.1% of total applications from 37.3% the previous week.

Among the federal programs, the FHA share of total applications decreased to 16.4% from 16.7% the week prior while the VA share of total applications increased to 13.3% from 13.1% and the USDA share of total applications slid to 0.5% from 0.6%.

Mike Fratantoni, MBA’s senior vice president and chief economist, observed, “Conventional purchase application volume increased 13% and was up 9% from year-ago levels, a surprisingly strong move given lingering economic uncertainty. Borrowers of conventional loans tend to have larger loan sizes and more apt to be move-up buyers. Government purchase loans were also up 6% for the week, led by a 9% growth in FHA purchase applications. With rates moving lower, refinance volume increased 11%, led by VA refinance applications, which were up 26%.”