Applications Down 6th Straight Week in MBA Weekly Survey

MBA NewsLink Staff

May 16, 2018

Mortgage applications fell for the sixth straight week as key interest rates fell slightly, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending May 11.

The Market Composite Index decreased by 2.7 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 4 percent from the previous week to its lowest level since August 2008. The refinance share of mortgage activity decreased to 35.9 percent of total applications, its lowest level since August 2008, from 36.3 percent the previous week.

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

The FHA share of total applications increased to 10.3 percent from 10.1 percent the week prior. The VA share of total applications decreased to 10.3 percent from 10.4 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.

"Treasury rates increased very slightly over the week, as the general sentiment was that inflation in April was not as strong as expected, despite a solid economic outlook," said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.77 percent from 4.78 percent, with points remaining unchanged at 0.50 (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 $453,100) increased to 4.73 percent from 4.65 percent, with points decreasing to 0.35 from 0.36 (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 decreased to 4.78 percent from 4.80 percent, with points increasing to 0.76 from 0.75 (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 remained unchanged at 4.20 percent, with points increasing to 0.53 from 0.48 (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, 4.09 percent, from 4.00 percent, with points increasing to 0.56 from 0.43 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity remained unchanged at 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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