Mortgage Apps: Rates Hit 7-year Highs

Bottom Line: Mortgage activity improved modestly in the last month with purchase activity now running just over 2% above last year's levels. But higher mortgage rates (30yr conforming balance fixed-rate mortgages hit their highest level since April 2011) are capping any upward momentum in activity. Additionally, refinancing activity remains extremely low. The MBA Mortgage Applications Index FELL by 2.6% during the week ended May 18 to 366.7, modestly below its 13 week average of 386.5 and 11.9% BELOW its year ago level. The Purchase Index FELL by 2.0% to 247.4, slightly below its 13 week average of 251.7 but 2.4% ABOVE its year ago level. The Refinance Index FELL by 3.7% to 1,018. With this decline, refinancing activity is moderately below its 13 week average of 1,125 and 27.4% BELOW its year ago level. Contract Mortgage Rates ROSE with the 30-year fixed rate increasing by 9 bps to 4.86% and with the 15-year fixed rate increasing by 11 bps to 4.31%.