Mortgage Applications Decrease in Latest MBA Weekly Survey

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Adam DeSanctis
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WASHINGTON, D.C. (August 19, 2020)Mortgage applications decreased 3.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 14, 2020.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.3 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 5 percent from the previous week and was 38 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 27 percent higher than the same week one year ago.

"Positive economic data reported last week on retail sales, as well as a large U.S. Treasury auction, drove mortgage rates to their highest level in two weeks. The rise in rates dampened refinance activity, but purchase applications continued their strong run and were 27 percent higher than a year ago - the third straight month of year-over-year increases," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Conventional purchase applications drove last week's increase, while applications for government loans decreased. The housing market remains a bright spot in the current economic recovery and these results, combined with July data on housing starts and homebuilder optimism, suggest that housing supply could be increasing to better meet the strong demand for buying a home."

The refinance share of mortgage activity decreased to 64.6 percent of total applications from 65.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 2.7 percent of total applications.

The FHA share of total applications decreased to 10.3 percent from 10.4 percent the week prior. The VA share of total applications decreased to 11.2 percent from 11.4 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 ($510,400 or less) increased to 3.13 percent from 3.06 percent, with points increasing to 0.36 from 0.33 (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 $510,400) increased to 3.41 percent from 3.40 percent, with points increasing to 0.35 from 0.31 (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 decreased to 3.16 percent from 3.23 percent, with points decreasing to 0.27 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 increased to 2.73 percent from 2.67 percent, with points increasing to 0.36 from 0.35 (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 2.95 percent from 3.00 percent, with points increasing to 0.41 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged 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.