Mortgage purchase applications drop to lowest level since May 1997

The rate of new mortgage purchase applications dropped 27.1 percent during the week ending May 14, compared to the week prior, according to the Mortgage Bankers Association’s weekly mortgage application survey. The drop brought the seasonally adjusted purchase index to the lowest level that the MBA has recorded since May 1997. The mortgage refinance index helped keep overall mortgage activity relatively stable, climbing 14.5 percent week-over-week, due in part to the 4.83 percent average 30-year fixed mortgage rate, the lowest rate recorded since November 2009, according to the MBA. Michael Fratantoni, vice president of research and economics with the MBA, said that the tax credit likely had a strong influence on the unusual mortgage activity. “The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season,” Fratantoni said. TRD