After rising somewhat sharply, mortgage rates started to come back down last week. However, lower mortgage pricing had little effect on buyer activity.
Total mortgage application volume fell nearly 3 percent for the week ending May 25, according to the Mortgage Bankers Association (MBA).
The Market Composite Index, a measure of mortgage loan application volume, dropped 2.9 percent on a seasonally adjusted basis from the week prior. On an unadjusted basis, the Index fell 4 percent compared with the previous week.
The MBA also reported that the Refinance Index dropped 5 percent from the previous week to its lowest level since December 2000. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 2 percent higher than the same week one year ago.
The refinance share of mortgage activity dropped to 35.3 percent of total applications, its lowest level since August 2008 when it was 35.7 percent. The adjustable-rate mortgage (ARM) share of activity also declined, dropping to 6.7 percent of total applications.
FHA loan activity also saw a decline. The FHA share of total applications decreased to 9.9 percent from 10.3 percent the week prior. The VA share of total applications increased to 9.9 percent from 9.8 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the previous week.
According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.84 percent from 4.86 percent, with points decreasing to 0.47 from 0.52 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) decreased to 4.73 percent from 4.81 percent, with points decreasing to 0.36 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rates for several other popular loan products also decreased, some more than others. This could be an excellent time to lock in a mortgage rate if you’re serious about buying a home. Rates are likely to change and may have already changed by the time you read this post. For the most accurate and up-to-date mortgage pricing, talk to a mortgage lender. If you’re looking for a mortgage lender in the state of Texas, please feel free to reach out to us today. Call us at (972) 591-3097 or fill out our online form to have your information reviewed by one of our team members. Once we have an idea of what you’re looking for in a Texas home loan, we will reach out to you!