Mortgage Applications Decrease in Latest MBA Weekly Survey

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Adam DeSanctis
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WASHINGTON, D.C. (September 4, 2019)Mortgage applications decreased 3.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 30, 2019.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 152 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 5 percent higher than the same week one year ago.

"Ongoing trade tensions between the U.S. and China led to volatile, yet declining Treasury rates last week, causing the 30-year fixed mortgage rate to fall to 3.87 percent, its lowest level since November 2016," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Despite lower borrowing costs, refinances were down from their recent peak two weeks ago, but still remained over 150 percent higher than last August, when rates were almost a percentage point higher."

Added Kan, "Purchase applications increased 1 percent last week and were 5 percent higher than a year ago. Consumers continue to act on these lower rates, but the volatility in the market is likely leading some borrowers to pause refinancing and buying decisions."

The refinance share of mortgage activity decreased to 60.4 percent of total applications from 62.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.7 percent of total applications.

The FHA share of total applications decreased to 10.2 percent from 10.5 percent the week prior. The VA share of total applications increased to 11.3 percent from 9.9 percent the week prior. The USDA share of total applications increased to 0.6 percent 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 3.87 percent from 3.94 percent, with points decreasing to 0.34 from 0.38 (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) increased to 3.94 percent from 3.89 percent, with points decreasing to 0.24 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.80 percent, with points decreasing to 0.32 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.29 percent from 3.31 percent, with points decreasing to 0.32 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 5/1 ARMs decreased to 3.40 percent from 3.42 percent, with points decreasing to 0.27 from 0.39 (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 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.