Significant Weekly Increase in Mortgage Applications

In a notable shift, mortgage applications in the United States surged by 11% in the week ending May 2, as revealed by the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

Interest Rates and Index Movements

The survey highlighted a decrease in the average contract interest rate for 30-year fixed-rate mortgages to 6.84% from 6.89% the previous week. Accompanying this, the seasonally adjusted Purchase Index rose to 162.8 from 146.6, and the Refinance Index increased to 721.0 from 649.0. The market index also saw a significant jump to 248.4 from 223.7.

Economic Context and Expert Insight

Michael Fratantoni, MBA’s SVP and chief economist, commented on the economic backdrop: "Last week's economic news, including a negative first-quarter GDP growth reading and signs of manufacturing sector contraction, contrasted with a solid April employment report. This mix led to a mostly downward impact on mortgage rates, reverting to early April levels."