Mortgage applications rose for the second week in a row during the week ended May 6, as some homebuyers managed to shrug off rising mortgage rates that have reached their highest level since 2009.
Mortgage applications rose 2% on a seasonally adjusted basis, thanks to strong gains in conventional and government purchase loans, the Mortgage Bankers Association said, citing its Market Composite Index.
The average contract interest rate for conforming 30-year mortgages of $647,200 or less rose to 5.53% from 5.36%, while the rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration increased to 5.37% from 5.27%.
“Despite a slow start to this year’s spring homebuying season, prospective buyers are showing some resiliency to higher rates,” MBA associate vice president of economic and industry forecasting Joel Kan said in a press release.
Kan noted that the share of adjustable-rate mortgages rose to 11% of overall loans and to 19% by dollar volume, as borrowers sought to combat higher rates.
“The rapid rise in mortgage rates continues to hit the refinance market, with activity 70% below a year ago,” Kan added. “Most homeowners refinanced to lower rates in the past two years.”
The refinance index slid 2% from the previous week and was down 72% from the same week a year ago. The refinance share of mortgage activity decreased to 32.4% of total applications from 33.9% the previous week.
The FHA share of total applications slid to 10.5% from 11.1%, while the VA share of total applications rose to 10.5% from 10.3%. The USDA share of total applications rose to 0.5% from 0.4%.
The seasonally adjusted purchase index rose 5% from the previous week, while the unadjusted purchase index gained 5% and was 8% lower than one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances of more than $647,200 rose to 5.08% from 4.92%, and the average contract interest rate for a 15-year fixed-rate mortgage increased to 4.79% from 4.68%.