Weak Application Volumes Get Weaker

Dragging refinance application volumes continue to weigh down total mortgage application activity at the beginning of April.

The Mortgage Bankers Association reported a 1.6 percent decline in its Weekly Mortgage Applications Survey for the week ending April 4. Unadjusted, application volumes were down 1 percent compared to the end of March.

Week-over-week, MBA’s Refinance Index fell 5 percent, declining to its lowest level since the end of last year. The decrease brought the refinance share of total mortgage activity down to just more than half—the lowest share since July 2009—compared to 53 percent the previous week.

With interest rates on the rise and consumers steadily pulling away from refinances, originators have indicated concerns about how to adjust to a more purchase-oriented market. As annual numbers show, consumers also have their own reservations.

Purchase home mortgage activity was healthier last week compared to the week prior, coming up 3 percent (both adjusted and unadjusted). Relative to last year, however, MBA says purchase applications fell 14 percent.

The average contract interest rate for a 30-year fixed-rate mortgage last week was 4.56 percent, according to MBA, with points increasing slightly to 0.33 for 80 percent loan-to-value ratio loans. The effective rate was unchanged week-over-week.