Mortgage activity inched downward for a second straight week, as purchases came in flat while refinances continued their decline. 

The Mortgage Bankers Association’s Market Composite Index, a measure of weekly mortgage applications based on surveys of the association’s members, dropped 1.2% on a seasonally adjusted basis for the period ending May 20. Seasonally adjusted volumes also came in 55% below levels from the same seven-day period one year ago. 

After falling by over 10% the previous week, the Purchase Index edged up 0.2% but volumes are still close to lows last seen in the first half of 2020, when economic shutdowns caused by the pandemic onset suppressed business activity across much of the U.S., according to Joel Kan, MBA’s associate vice president of economic and industry forecasting. 

“Currently, higher rates, low inventory, and high prices are keeping prospective buyers out of the market,” Kan noted in a press release. 

Elevated rates continue to dampen interest in refinances as well. The Refinance Index came in 4% lower week over week, even as interest rates showed some moderation over the past 14 days. However, they are still coming in far higher than what consumers were used to seeing a year ago, Kan said.

“Most refinance borrowers continue to remain on the sidelines as a result, and refinance applications have fallen in nine of the past 10 weeks,” Kan said. The Refinance Index has tumbled 75% from the same weekly time frame a year ago, and compared to January 2022, refinance activity is down 66%, according to Kan.

The share of new refinance activity relative to overall volume also decreased to 32.3% from 33% a week earlier. Meanwhile, adjustable-rate mortgages accounted for a smaller portion of the week’s volume compared to the prior week, falling to a 9.4% share from 10.3%.

Average loan sizes dropped across all categories for the second consecutive weekly period, with the mean overall amount declining 1.5% to $383,000 from $388,900 seven days earlier. The average size for new refinances came in at $280,100, a 1% drop from $283,000. Average purchase-loan sizes took a larger step back, falling 2% to $432,000 from $441,100, possibly reflecting the first signs reported by Redfin that sellers are beginning to lower asking prices

Federally backed activity remained relatively flat, with the Government Index inching down by less than a tenth of a percent during the week, seasonally adjusted. The share of new government-backed applications also accounted for nearly the same share relative to overall volume week over week. Federal Housing Administration-sponsored applications equaled 11.3% of activity, up from 11.1% seven days earlier, while loans backed by the Department of Veterans Affairs grabbed a 10.4% share, compared to 10.5%. U.S. Department of Agriculture-sponsored loans accounted for 0.5% of all mortgages, unchanged from the prior week. 


The majority of rates tracked among MBA members showed relatively slight movements of a few basis points, a far cry from earlier in the spring when they surged to highs not seen in over a decade. 

The contract average of 30-year mortgages with balances conforming to the Fannie Mae and Freddie Mac loan limit of $647,200 dropped to 5.46% from 5.49% a week earlier. 

The average contract rate for 30-year jumbo loans with balances exceeding the conforming threshold inched down by a single basis point to 5.02% from 5.03% week over week.

The average rate of the FHA-backed 30-year mortgage contract moved in the opposite direction, rising 4 basis points to 5.36% from 5.32% the week prior. 

The contract interest rate of the 15-year fixed mortgage slipped to an average of 4.72%, down from 4.73% seven days earlier. 

And after dropping in the previous weekly period, the contract rate average of the 5/1 adjustable-rate mortgage headed back upward, coming in at 4.49% compared to 4.42%. 

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