Current mortgage activity, as indicated by the Mortgage Bankers Association’s latest Weekly Application Survey, indicates a slight rise in purchasing activity and slight decline in refinancings of existing home loans, each by about 6% on a seasonally adjusted basis.
Overall, the Market Composite Index decreased by about 2.6%. The contract rate as determined by the Primary Mortgage Market Survey slid by 2 basis points to 3.41% from the previous week, still hovering near the record low for the series that was reached at the beginning of this month.
Applications for home purchases continue to recover from April’s sizeable drop and have now increased for five consecutive weeks. In a similar vein, on the supply side, the HMI, indicating builders’ confidence, posted a solid gain in May after the historic drop owing the outbreak of COVID-19.
On a year-over-year basis, as the above figure shows, purchasing of homes rebounded from the low reached in April, though in the latest week it was still 1.5% lower than it was the same week one year ago. Refinancing, compared to a year ago, is higher and continues to maintain its upward trajectory looking at the series of its year-over-year gains.
According to Fannie Mae, the refinance volume of applications is poised to reach a 17-year high as it forecasts mortgage rates to tumble further. The refinance share of mortgage activity decreased to 64.3 percent of total applications from 67.0 percent the previous week.