Mortgage Applications Decrease in Latest MBA Weekly Survey

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Adam DeSanctis
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WASHINGTON, D.C. (September 25, 2019)Mortgage applications decreased 10.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending September 20, 2019.

The Market Composite Index, a measure of mortgage loan application volume, decreased 10.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 11 percent compared with the previous week. The Refinance Index decreased 15 percent from the previous week and was 104 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 9 percent higher than the same week one year ago.

"U.S. Treasury yields trended downward over the course of last week, as the Federal Reserve meeting highlighted the elevated uncertainty in the economic outlook. However, despite falling yields, mortgage rates ticked up again and have risen 20 basis points over the past two weeks," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "The increase in rates led to fewer refinances, and activity has now dropped 17 percent over the last two weeks."

Added Kan, "Purchase applications also decreased, likely related to the two-week jump in rates, but still remained 9 percent higher than last year. The recent data on increased existing-home sales and new residential construction points to the underlying strength in the purchase market this fall."

The refinance share of mortgage activity decreased to 54.9 percent of total applications from 57.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.1 percent of total applications.

The FHA share of total applications increased to 11.4 percent from 10.9 percent the week prior. The VA share of total applications increased to 13.1 percent from 12.7 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) increased to 4.02 percent from 4.01 percent, with points increasing to 0.38 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to 4.00 percent from 4.01 percent, with points decreasing to 0.26 from 0.29 (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 increased to 3.90 percent from 3.89 percent, with points decreasing to 0.23 from 0.30 (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 increased to 3.46 percent from 3.42 percent, with points remaining unchanged at 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.39 percent from 3.54 percent, with points remaining unchanged at 0.29 (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.