Mortgage Applications Increase in Latest MBA Weekly Survey

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Adam DeSanctis
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WASHINGTON, D.C. (May 13, 2020)Mortgage applications increased 0.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 8, 2020.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 201 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 11 percent from one week earlier. The unadjusted Purchase Index increased 11 percent compared with the previous week and was 10 percent lower than the same week one year ago.

"There continues to be a stark recovery in purchase applications, as most large states saw increases in activity last week. In the ten largest states in MBA's survey, New York - after a 9 percent gain two weeks ago - led the increases with a 14 percent jump. Illinois, Florida, Georgia, California and North Carolina also had double-digit increases last week," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "We expect this positive purchase trend to continue - at varying rates across the country - as states gradually loosen social distancing measures, and some of the pent-up demand for housing returns in what is typically the final weeks of the spring home buying season."

Added Kan, "Mortgage rates stayed close to record-lows, but refinance applications decreased for the fourth consecutive week, driven by a 5 percent drop in conventional refinances. Despite the downward trend over the last month, mortgage lenders remain busy. Refinance activity was up 200 percent from a year ago."

The refinance share of mortgage activity decreased to 67.0 percent of total applications from 70.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 2.9 percent of total applications.

Looking at the impact at the state level, here are results showing the non-seasonally adjusted, week-over- week percent change in the number of purchase applications from Washington, California and New York: 

The FHA share of total applications increased to 11.5 percent from 11.1 percent the week prior. The VA share of total applications increased to 13.7 percent from 13.3 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 ($510,400 or less) increased to 3.43 percent from 3.40 percent, with points decreasing to 0.29 from 0.30 (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) remained unchanged at 3.69 percent, with points decreasing to 0.33 from 0.34 (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 remained unchanged at 3.37 percent, with points increasing to 0.21 from 0.20 (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 2.92 percent from 2.93 percent, with points decreasing to 0.28 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 5/1 ARMs increased to 3.26 percent from 3.20 percent, with points decreasing to 0.04 from 0.36 (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.