WASHINGTON – The number of mortgage loan applications nationwide last week continued their decline as interest rates again rose on 30-year loans, the Mortgage Bankers Association said its weekly report.
For the week ended May 30, the group’s seasonally adjusted Market Composite Index – a measure of mortgage loan application volume – fell to a five-year low of 502.3 points. That represented a 15.3-percent decrease from the week before, and a 20.3 percent decline from the same week a year ago.
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The MBA’s seasonally adjusted Purchase Index fell 5.4 percent last week to 333.6 points, after rising 0.1 percent the week before. Meanwhile, the seasonally adjusted Refinance Index plunged 25.7 percent compared with the previous week, to 1496.1 points, after falling 8.9 percent in the week ended May 23, the MBA said.
Refinancing attempts accounted for 40.6 percent of total applications last week, down from 46.1 percent the week before. Adjustable-rate mortgages (ARMs) also fell, to 8.7 percent of applications from 9.3 percent in the week ended May 23, despite a decline in interest rates for ARMs.
The average contract interest rate for a 30-year fixed rate mortgage rose to 6.17 percent last week from 5.97 percent the week before and 5.90 percent the week ended May 16. Meanwhile, the average rate for a one-year ARM fell to 6.80 percent last week from 6.92 percent in the week ended May 23, although it remained above the preceding week’s 6.71 percent.
The MBA survey, compiled each week since 1990, covers about half of all retail residential mortgage originations nationwide.
“We continue to view the residential real-estate crash as the most important factor underlying current recessionary conditions in the United States,” Maury Harris, chief economist at UBS Securities LLC in Stamford, Conn., said in an e-mail to clients, according to Bloomberg News. “Home prices are falling at a faster rate, a signal of worsening supply-demand imbalance,” Harris added.
The Mortgage Bankers Association is a trade group representing the real estate finance industry. Its 3,000 member companies include mortgage firms, commercial banks, thrifts, life insurance companies and others. Additional information, including the MBA’s Weekly Application Survey, is available at www.mortgagebankers.org.
