Applications Down Slightly in MBA Weekly Survey

MBA NewsLink Staff

April 25, 2018

Mortgage applications fell for the third straight week, albeit slightly, as key interest rates rose to their highest level in five and a half years, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending April 20.

The Market Composite Index decreased by 0.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 1 percent compared to the previous week.

The Refinance Index decreased by 0.3 percent from the previous week. The refinance share of mortgage activity decreased to 37.2 percent of total applications, the lowest level since September 2008, from 37.6 percent the previous week.

The seasonally adjusted Purchase Index was unchanged from one week earlier. The unadjusted Purchase Index increased by 1 percent compared to the previous week and was 11 percent higher than the same week one year ago.

The FHA share of total applications decreased to 10.2 percent from 10.6 percent the week prior. The VA share of total applications decreased to 10.1 percent from 10.4 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

"Treasury rates increased significantly last week, partly driven by the market's reaction to more hawkish comments from key Fed officials and positive economic news on strong retail sales and declining jobless claims," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. "The conventional purchase index increased to its highest level since January 2009. Applications for government purchase applications, loans more likely to be used by first-time buyers, declined for the week."

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since September 2013, 4.73 percent, from 4.66 percent, with points increasing to 0.49 from 0.46 (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 $453,100) increased to its highest level since January 2014, 4.64 percent, from 4.53 percent, with points increasing to 0.39 from 0.38 (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 4.71 percent from 4.70 percent, with points increasing to 0.79 from 0.53 (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 its highest level since April 2011, 4.13 percent, from 4.08 percent, with points increasing to 0.52 from 0.47 (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 its highest level since February 2011, 3.98 percent, from 3.94 percent, with points increasing to 0.44 from 0.43 (including 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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