Mortgage Applications Fall Despite Lower Rates

Raw mortgage application volume slipped 11% for the week ending April 10, according to a weekly survey released Wednesday by Mortgage Bankers Association (MBA). The four-week moving index for raw application volume rose 5.3%, indicating overall interest is still strong despite the weekly downturn. The Passover/Easter weekend “may have contributed” to the fall in application volume, as the MBA said it did not include any adjustment for the days consumers chose to observe the religious holiday over house hunting. Refinance application volume fell 10.9% for the week, while the four-week moving average was up 6.5%. The refinance share of mortgage application activity fell slightly to 77.8 percent of total applications, from 77.9 percent the week before, according to the MBA’s data. The index measuring purchase application volume slipped 11.3%, with conventional purchase application volume down 13.5% and government purchase application volume — think FHA-insured loan applications, here — down 7.7% for the week, according to the MBA. The indexes may have fallen from the previous week, but the declines were relatively even across the board, indicating that application interest fell in tandem across various products, from purchase to refinance applications. Application volume showed increasing strength since early March. The Federal Reserve’s mid-March announcement it would fund an additional $1.5 trillion to credit-unlocking efforts began pushing down mortgage rates and driving up applications. After rising slightly last week, average mortgage rates fell again in the week ending April 10, suggesting some force other than affordability — which is largely affected by mortgage rates — drove down applications. The MBA found 30-year fixed mortgage rates slipped to an average 4.7% this week from 4.73% a week earlier, while 15-year fixed mortgage rates fell to an average 4.46% from 4.49% the week before. A separate survey conducted by Mortgage Maxx LLC found that application activity adjusted for multiple applications from a single household fell 7.5% for the same week ending April 10. Household activity in California alone slipped 14.7%, the study found. The Mortgage Application Index — or MAX — publisher Paul Descloux, in his weekly commentary on the index, said the weekly decline bore no “[sic] discernable impact” from Good Friday and showed a continuing trend of . “Leading mortgage applications take a breather despite widely publicized sub-five percent mortgages” this week, Descloux wrote. He reiterated a point his commentary repeatedly brings up; the fees and “expenses associated with monthly mortgage savings” through the refinance process may make less and less sense to cash-strapped borrowers. Visit www.mbaa.org and www.mortgagemaxx.us for further details. Write to Diana Golobay at diana.golobay@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.