Mortgage Applications Increase in Latest MBA Weekly Survey

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Adam DeSanctis
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WASHINGTON, D.C. (June 12, 2019)Mortgage applications increased 26.8 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 7, 2019. The results for the week ending May 31, 2019 included an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 26.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 38 percent compared with the previous week. The Refinance Index increased 47 percent from the previous week. The seasonally adjusted Purchase Index increased 10 percent from one week earlier. The unadjusted Purchase Index increased 20 percent compared with the previous week and was 10 percent higher than the same week one year ago.

"Mortgage rates for all loan types fell by a sizeable margin for the second straight week, pulled down by trade tensions with China and Mexico, the financial markets reacting to more bearish communication from several Fed officials, and weaker than expected hiring in May," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Despite the less positive outlook, both purchase and refinance applications surged, driven mainly by these lower rates. The refinance index jumped 47 percent to its highest level since 2016."

Added Kan, "With the 30-year fixed-rate mortgage at its lowest level since September 2017, purchase activity was more than 10 percent higher than a year ago. Demand is still relatively strong, but there is likely restraint from  some prospective buyers, driven by some economic uncertainty. Furthermore, housing supply is still very tight for first-time buyers."

The refinance share of mortgage activity increased to 49.8 percent of total applications from 42.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.9 percent of total applications.

The FHA share of total applications decreased to 8.9 percent from 9.5 percent the week prior. The VA share of total applications decreased to 11.0 percent from 11.3 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.12 percent from 4.23 percent, with points remaining unchanged at 0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to 4.04 percent from 4.09 percent, with points decreasing to 0.17 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.09 percent from 4.24 percent, with points decreasing to 0.26 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.53 percent from 3.65 percent, with points decreasing to 0.32 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.43 percent from 3.62 percent, with points increasing to 0.32 from 0.19 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

If you would like to purchase a subscription of MBA's Weekly Applications Survey, please visitwww.mba.org/WeeklyApps, contact mbaresearch@mba.org or click here.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.