Mortgage applications drop after 11-month peak

Decrease in application follows two weeks of sizeable increases

Mortgage applications drop after 11-month peak

The number of mortgage applications decreased by 2.7% from last week, according to the Mortgage Bankers Association's (MBA) weekly mortgage applications survey.

The market composite index, a measure of mortgage loan application volume, decreased 2.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased 0.3% compared with the previous week.

The decrease in mortgage applications followed two weeks of gains, capped by an 11-month peak last week.

"Mortgage application activity cooled off last week after two consecutive weeks of sizeable increases,” said Joel Kan, associate vice president of economic and industry forecasting at MBA. “Both purchase and refinance applications saw declines but remained at healthy levels, with the purchase index remaining close to a nine-year high, and the refinance index hovering near its highest level since last spring. Reversing the recent downward trend, rates increased for most loan types last week, due to better-than-expected unemployment claims, easing trade tensions and stabilization in the equity markets."

The refinance share of mortgage activity decreased to 44.5% of total applications from 46.8% the previous week, while the adjustable-rate mortgage (ARM) share of activity decreased to 8.3% of total applications.