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Purchase mortgage applications across the country are now only 1.5 percent off the same week one year ago according to the Mortgage Bankers Association’s latest survey.

The MBA’s seasonally adjusted Purchase Index increased 6 percent week-over-week for the seven days ending May 15. Its seasonally unadjusted Purchase Index is also up 6 percent week-over-week for the same period, and is only 1.5 percent lower than the same week one year ago.

At the same time, refinance applications are down 6 percent week-over-week but are still 160 percent higher than the same week in 2019. The refinance share of mortgage activity decreased to 64.3 percent of total applications from 67 percent the previous week.

The overall effect caused the total number of mortgage applications for the week ending May 15 to drop 2.6 percent week-over-week.

“Applications for home purchases continue to recover from April’s sizeable drop and have now increased for five consecutive weeks. Purchase activity – which was 35 percent below year-ago levels six weeks ago – increased across all loan types and was only 1.5 percent lower than last year,” MBA Associate Vice President of Economic and Industry Forecasting Joel Kan said in a statement. “Government purchase applications, which include FHA, VA and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months. As states gradually reopen and both home buyer and seller activity increases, we will be closely watching to see if these positive trends continue, or if they reflect shorter-term, pent-up demand.”

Kan suggested that the drop in refinance applications could reflect tightening lending standards across the nation.

“Despite mortgage rates remaining close to record-lows, refinance activity slid to its lowest level in over a month. The average loan amount for refinances fell to its lowest level since January – potentially a sign that part of the drop was attributable to a retreat in cash-out refinance lending as credit conditions tighten,” he said. “We still expect a strong pace of refinancing for the remainder of the year because of low mortgage rates. With many homeowners still facing economic and employment uncertainty, these refinance opportunities will allow them to save money on their monthly payments, which can then be used to help other areas of their budgets.”

The FHA share of total applications remained unchanged from 11.5 percent the week prior. The VA share of total applications decreased to 13.4 percent from 13.7 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.6 percent the week prior.