WASHINGTON (6/26/14)--Mortgage application activity continues to slide, as the Mortgage Bankers Association (MBA) reported in its weekly survey that its composite index slipped by 1% for the week ending June 20.
Within the overall index, purchase application activity has fallen seven out of the last nine weeks (Economy.com June 25).
"Three full weeks into June and mortgage application activity is showing no signs of the significant rebound expected by most at the beginning of the year," said Gregory Bird, Moody's analyst (Economy.com), adding that purchase applications are historically low.
Averaged over the last four weeks, refinance activity was largely unchanged but fell 56% behind the pace seen last year at this time. Purchase applications dropped 2% over the past month and fell 16% year-over-year.
Refinance activity, which constituted 52% of all applications, declined 0.9% for the week.
As for mortgage rates, the 30-year fixed-rate fell 3 basis points (bp) to 4.33%, which is 13 points lower than last year at this time. Jumbo 30-year fixed-rate mortgage rates declined 4 bp to 4.28%, while the five-year adjustable rate mortgage rate climbed 3 points, ending the week at 3.23%, according to Economy.com.
Moody's further reported Wednesday that the MBA also announced that it has trimmed its purchase originations forecast for the year and lowered expectations for 2015.
Apparently, the weakness in the housing market is being driven by the absence of first-time homebuyers, with that segment making up only 27% of all buyers in May, according to a report by the National Association of Realtors released earlier this week (Economy.com).
Historically, first-time home buyers make up 40% of the market, the report said.