The Mortgage Bankers Association’s (MBA) measure of mortgage application volume saw another decline last week, driving applications down further to their lowest level since the start of the new millennium.
MBA’s Market Composite Index, a week-to-week gauge of application numbers, fell 5.9 percent on a seasonally adjusted basis for the week ending April 25, the group reported. On an unadjusted basis, the index decreased 5 percent.
“Both purchase and refinance activity fell last week, and the market composite index is at its lowest level since December 2000,” said MBA chief economist Mike Fratantoni.
Week-over-week, the association’s Refinance Index dropped 7 percent, knocking it down to its lowest level since 2008. Refinance activity accounted for 50 percent of applications, the smallest share since July 2009.
Meanwhile, the Purchase Index fell 4 percent from the week prior, ending up 21 percent lower than the same week last year.
While the data doesn’t look promising for originations—which are already sitting at a 14-year low, according to Black Knight Financial Services—analysts are quick to point out that MBA’s application numbers don’t necessarily show the entire picture. Commenting on the most recent index data, Calculated Risk blogger Bill McBride noted, “The purchase index is probably understating purchase activity because small lenders tend to focus on purchases, and those small lenders are underrepresented in the purchase index.”
Meanwhile, MBA reports the average contract interest rate for a 30-year fixed-rate mortgage was flat last week at 4.49 percent, though points fell to 0.38 from 0.50 (including the origination) the week before.