Applications Down Again in MBA Weekly Survey

MBA NewsLink Staff

September 27, 2017


Mortgage applications fell for the second straight week, albeit slightly, as key interest rates ticked up, the Mortgage Bankers Association reported in its Weekly Mortgage Applications Survey for the week ending September 22.

The Market Composite Index decreased by 0.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 1 percent compared to the previous week.

The Refinance Index decreased by 4 percent from the previous week. The refinance share of mortgage activity decreased to 50.8 percent of total applications from 52.1 percent the previous week.

The seasonally adjusted Purchase Index increased by 3 percent from one week earlier. The unadjusted Purchase Index increased by 2 percent compared to the previous week and was 4 percent higher than the same week one year ago.

"Mortgage rates increased to their highest levels in almost a month following a relatively hawkish Fed statement last week, driving the decline in refinance activity," said Joel Kan, MBA Associate Vice President for Industry Surveys and Forecasting. "The [Federal Open Market Committee] announced the start of its plan to reduce the size of its balance sheet and indicated plans to increase short-term rates one more time this year."

Kan noted purchase applications increased slightly last week, but were still weighed down by tight inventories of homes for sale and lingering effects from the hurricanes. "Mortgage application activity in Florida and Texas last week were still below their respective year-to-date paces," he said. "Data on Puerto Rico is not collected as part of the Weekly Application Survey."

MBA reported the FHA share of total applications decreased to 9.6 percent from 9.9 percent the week prior. The VA share of total applications decreased to 10.0 percent from 10.1 percent the week prior. The USDA share of total applications remained unchanged from the week prior at 0.7 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.11 percent from 4.04 percent, with points unchanged at 0.40 (including origination fee) for 80 percent loan-to-value ratio 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 $424,100) increased to 4.06 percent from 3.99 percent, with points increasing to 0.26 from 0.23 (including 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 FHA increased to 3.98 percent from 3.97 percent, with points increasing to 0.50 from 0.34 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.38 percent from 3.35 percent, with points decreasing to 0.40 from 0.44 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages increased to 3.38 percent from 3.30 percent, with points increasing to 0.45 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 6.5 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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