Mortgage Applications Decrease in Latest MBA Weekly Survey

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Adam DeSanctis
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WASHINGTON, D.C. (November 20, 2019)Mortgage applications decreased 2.2 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending November 15, 2019. This week's results include an adjustment for the Veterans Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 14 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 152 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 7 percent from one week earlier. The unadjusted Purchase Index decreased 8 percent compared with the previous week and was 7 percent higher than the same week one year ago.

"U.S. and China trade anxieties and protests in Hong Kong pulled U.S. Treasuries lower last week, and the 30-year fixed mortgage rate followed the same path, dipping below 4 percent," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Despite lower rates, mortgage applications decreased 2.2 percent, driven by an 8 percent slide in refinance activity. Rates have stayed in the same narrow range of around 4 percent since July, so we may be starting to see the expected slowdown in refinancing as the pool of eligible homeowners shrinks."

Added Kan, "Purchase applications were 7 percent higher than a year ago, which adds another solid data point to the recent increases in new home sales and housing starts. There may be signs that housing inventory is starting to meaningfully rise, which will help with affordability and provide more choices for potential homebuyers."

The refinance share of mortgage activity decreased to 59.5 percent of total applications from 61.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.6 percent of total applications.

The FHA share of total applications decreased to 13.0 percent from 13.1 percent the week prior. The VA share of total applications increased to 12.9 percent from 12.7 percent the week prior. The USDA share of total applications remained unchanged from 0.5 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 3.99 percent from 4.03 percent, with points increasing to 0.33 from 0.31 (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 3.93 percent from 3.98 percent, with points increasing to 0.28 from 0.22 (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 3.80 percent from 3.85 percent, with points increasing to 0.32 from 0.28 (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 3.40 percent from 3.43 percent, with points increasing to 0.31 from 0.28 (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 increased to 3.51 percent from 3.40 percent, with points increasing to 0.23 from 0.17 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. 

If you would like to purchase a subscription of MBA's Weekly Applications Survey, please visit www.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.