Applications Down Again in MBA Weekly Survey

MBA NewsLink Staff

August 01, 2018

Mortgage applications fell for the third straight week as key interest rates jumped, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending July 27.

The Market Composite Index decreased by 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 3 percent compared to the previous week.

The (unadjusted) Refinance Index decreased by 2 percent from the previous week. The refinance share of mortgage activity increased to 37.1 percent of total applications from 36.8 percent the previous week.

The seasonally adjusted Purchase Index decreased by 3 percent from one week earlier. The unadjusted Purchase Index decreased by 3 percent compared to the previous week and was 1 percent higher than the same week one year ago.

The FHA share of total applications increased to 10.4 percent from 9.9 percent the week prior. The VA share of total applications increased to 10.5 percent from 10.2 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

"Rates rose slightly last week due to easing trade tensions between the U.S. and Europe, and signals on Japanese and European monetary policy," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. "Application activity remained slow, which is in line with weak trends in other housing indicators such as home sales and housing starts. Both purchase and refinance activity decreased last week. Purchase applications decreased for the third week and the purchase index was at its lowest level in a month as low housing inventory and rising home prices continue to be an issue."

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.84 percent from 4.77 percent, with points remaining unchanged at 0.45 (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 4.76 percent from 4.72 percent, with points increasing to 0.37 from 0.31 (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 remained unchanged at 4.78 percent, with points increasing to 0.74 from 0.73 (including 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 increased to 4.29 percent from 4.23 percent, with points increasing to 0.53 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 its highest level in the history of the survey, 4.17 percent from 4.09 percent, with points increasing to 0.32 from 0.29 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 6.4 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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