Refinancing shored up the Mortgage Bankers Association's Market Composite Index during the week ended May 19.  While purchase mortgages slowed, the Composite still managed a 4.4 percent increase from the previous week on a seasonally adjusted basis and a 3.0 percent gain unadjusted.

The Refinance Index has been erratic but generally trending down for months.  It surged by 11 percent compared to the week ended May 12, reaching its highest level since March.  The refinance share of applications came off a nine-year low of 41.1 percent the previous week, growing to 43.9 percent, the largest share in two months.

Purchase mortgage applications declined, edging 1 percent lower on a seasonally adjusted basis and 2 percent unadjusted.  The index remained 3 percent above the level one year earlier.

Applications for FHA loans accounted for 10.8 percent of the total, up from 10.6 percent the previous week.  The VA share decreased to 10.5 percent from 10.7 percent and the USDA share was unchanged at 0.8 percent.

Contract mortgage rates retreated during the week, some returning to November 2016 levels.  Effective rates for fixed-rate mortgages (FRM) were also lower.

The average contract interest rate for 30-year FRM with conforming loan balances ($424,100 or less) decreased to its lowest level since November 2016, 4.17 percent, from 4.23 percent. Points increased to 0.39 from 0.37.

Jumbo 30-year FRM (loan balances greater than $424,100) also had contract levels not seen since November, an average of 4.11 with 0.31 point.  The previous week the rate averaged 4.23 percent with 0.30 point.

The average contract interest rate for 30-year FRM backed by the FHA declined 4 basis points to 4.07 percent.  Points dipped to 0.34 from 0.37.

The average rate for 15-year FRM fell to 3.45 percent, its lowest level since November, from 3.51 percent. Points rose to 0.38 from 0.33.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 3.27 percent from 3.30 percent. Points increased to 0.35 from 0.21, driving the effective rate higher. The ARM share of activity increased to 8.2 percent of total applications from 8.1 percent.

MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential mortgage applications.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.