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‘Mixed Bag of Action’ in the Mortgage Market

Mortgage applications decreased by .09% in one week, according to numbers from the Mortgage Bankers Association (MBA) and the Market Composite Index, a measure of mortgage loan application volume, for the week ending April 30.

The Refinance Index increased 0.1% from the previous week and was 17% lower than the same week one year ago.

"There was a mixed bag of action in the mortgage market last week. Mortgage rates were slightly higher, refinance applications were essentially unchanged, and purchase applications fell for the second straight week," said Joel Kan, MBA's Associate VP of Economic and Industry Forecasting.

"Both conventional and government purchase applications declined, but average loan sizes increased for each loan type. This is a sign that the competitive purchase market, driven by low housing inventory and high demand, is pushing prices higher and weighing down on activity. The higher prices are also affecting the mix of activity, with stronger growth in purchase loans with larger-than-average balances."

Added Kan, "An increase in conventional refinances was offset by a decline in government refinances. The 30-year fixed rate was up slightly to 3.18%, which is still 22 basis points lower than a year ago, but higher than it was between mid-2020 and February 2021."

The MBA survey covers about 75% of all U.S. retail residential mortgage applications and includes intel from mortgage bankers, commercial banks, and thrifts.

The weekly report also showed the refinance share of mortgage activity increased to 61.0% of total applications from 60.6% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.9% of all applications.

Broken down by type of loan, the FHA share of total applications decreased to 10.1% from 10.7% one week prior. The VA share decreased to 11.9% from 12.2%, and the USDA share of total applications remained unchanged at 0.4%.

The 30-year fixed mortgage rate with conforming loan balances of $548,250 or less increased from 3.17% to 3.18%.

The full weekly report or a subscription to each week's reports can be found at mba.org.

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media/Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning news, among others. Contact Christina at christina.hughesbabb@thefivestar.com.
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