Mortgage Applications Down in MBA Weekly Survey

MBA NewsLink Staff 

March 02, 2016


Mortgage applications fell from from one week earlier even as key interest rates continued to drop, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending February 26.

The previous week's results included an adjustment for the President's Day holiday.

The Market Composite Index decreased by 4.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 7 percent compared to the previous week.

The Refinance Index decreased by 7 percent from the previous week, reaching its lowest levels since January. The refinance share of mortgage activity decreased to its lowest level since January 2016, 58.6 percent of total applications, from 61.0 percent the previous week.

The seasonally adjusted Purchase Index decreased by 1 percent from one week earlier. The unadjusted Purchase Index increased by 14 percent compared to the previous week and was 27 percent higher than the same week one year ago.

The FHA share of total applications remained unchanged from 12.0 percent the week prior. The VA share of total applications decreased to 12.1 percent from 13.0 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

"Despite a slight drop in rates, refinance applications decreased overall," said Joel Kan, MBA Associate Vice President for Forecasting and Industry Surveys: "Applications for both conventional and government refinance loans decreased, as the supply of borrowers who could benefit from rates at this level begins to diminish. VA refinance applications led the decline with an 18 percent drop. The average loan amount for refinance loans was $279,200, the lowest since mid-January, before the latest rally in refinance activity started."

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.83 percent from 3.85 percent, with points decreasing to 0.39 from 0.42 (including origination fee) for 80 percent loan-to-value ratio 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 $417,000) decreased to 3.75 percent from 3.80 percent, with points increasing to 0.31 from 0.25 (including 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 FHA decreased to 3.67 percent from 3.72 percent, with points decreasing to 0.40 from 0.45 (including 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 3.13 percent from 3.12 percent, with points decreasing to 0.31 from 0.40 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages decreased to 3.02 percent from 3.07 percent, with points increasing to 0.31 from 0.30 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 5.6 percent of total applications.

The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

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