Washington, DC, United States (4E) – Mortgage applications in the U.S. dropped for the week ending May 23 at a seasonally adjusted 1.2 percent despite lower rates and expectations of improving home sales in May, according to a report by the Mortgage Bankers Association (MBA).
The average rate for 30-year fixed-rate mortgages with conforming loan balances fell to 4.31 percent, the lowest level since June 2013, the MBA said. Total mortgage applications for refinances and home purchases tumbled 48 percent from a year ago.
Mortgage applications to refinance home loans have dropped since last summer, when rates rose by more than one percentage point. The figure fell 1 percent last week from the previous week and are down almost 62 percent from the previous year. The refinance percentage of mortgage activity currently stands at 52 percent of total applications, lower compared with highs of over 80 percent in the early months of 2013.
Applications for home purchases, a gauge of future home sales, dropped 1 percent from the prior week, but the comparison with the year-earlier data continues to widen. Purchase applications fell 11 percent two weeks ago year over year, while last week saw an annual drop of 15 percent.
April sales for existing and new homes both increased, but the all-cash share of sales continues to be at record-high levels. In a separate report, the National Association of Realtors said that 33 percent of existing home sales were all-cash deals.