Purchase Activity Down

Purchase activity fell for a fifth straight week, but this time refinance applications also took a dive, according to the latest survey from the Mortgage Bankers Association.

The group’s seasonally adjusted purchase index slipped 5.7 percent from one week earlier, while the unadjusted purchase index was off 16.3 percent from the previous week and 30.4 percent lower than the Memorial Day week last year.

The refinance index, which had increased for a month straight, finally pulled back, slipping 14.3 percent from the previous week.

“Purchase and refinance applications dropped this week, even after an adjustment for the Memorial Day holiday,” said Michael Fratantoni, MBA’s Vice President of Research and Economics, in a release.

“Purchase applications are now 35 percent below their level of four weeks ago, as homebuyers have not yet returned to the market following the expiration of the homebuyer tax credit at the end of April.”

He noted that refinance applications were also off despite record low rates, partially because many borrowers either already refinanced, or cannot qualify due to uncertain job situations and/or underwater mortgages.

Meanwhile, the 30-year fixed slipped to 4.81 percent from 4.83 percent, while the 15-year fixed increased to 4.26 percent from 4.24 percent.

The out-of-favor one-year adjustable-rate mortgage fell to 6.94 percent from 6.96 percent.

Please note that the interest rates above are good for mortgages at 80 percent loan-to-value.

The MBA’s weekly survey covers more than half of all retail, residential loan applications, but does not factor out duplicate or rejected apps, which have surely risen since the mortgage crisis began.

If you are interested in refinancing you can receive real time quotes and payment options by calling me directly. You can reach me, Gene Neal at 877-276-6400 Ext 101.