Mortgage applications rise for second week despite historically high rates

Mortgage applications rose for the second straight week in the week ended May 6 as some buyers managed to shrug off rising mortgage rates that hit their highest level since 2009.

Mortgage applications rose 2% on a seasonally adjusted basis, driven by strong gains in conventional and government purchase loans, the Mortgage Bankers Association said, citing its Composite Market Index.

The average contractual interest rate for 30-year conforming mortgages of $647,200 or less fell from 5.36% to 5.53%, while the rate for 30-year fixed-rate mortgages backed by Federal Housing Administration went from 5.27% to 5.37%.

“Despite a slow start to the home buying season in the spring of this year, potential buyers are showing some resistance to higher rates,” said Joel Kan, associate vice president of economic and industrial forecasts at the MBA. Press release.

Kan noted that the share of adjustable-rate mortgages has risen to 11% of all loans and 19% in dollar volume as borrowers seek to combat rising rates.

“Rapidly rising mortgage rates continue to plague the refinance market, with activity 70% lower than a year ago,” Kan added. “Most owners have refinanced at lower rates over the past two years.”

The refinance index slid 2% from the previous week and was down 72% from the same week a year ago. The refinancing share of mortgage activity fell to 32.4% of total applications from 33.9% the previous week.

FHA’s share of total claims fell from 11.1% to 10.5%, while VA’s share of total claims fell from 10.3% to 10.5%. USDA’s share of total applications fell from 0.4% to 0.5%.

The seasonally adjusted shopping index was up 5% from the previous week, while the unadjusted shopping index gained 5% and was 8% lower than a year ago.

The average contractual interest rate for 30-year fixed rate mortgages with jumbo loan balances over $647,200 fell from 4.92% to 5.08%, and the average contractual interest rate for a 15-year fixed rate mortgage went from 4.68 to 4.79%. %.

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