Applications Down 8th Straight Week in MBA Weekly Survey

MBA NewsLink Staff

May 30, 2018

For the eighth consecutive week, the Mortgage Bankers Association reported a drop in mortgage application activity.

The MBA Weekly Mortgage Applications Survey for the week ending May 25 reported the overall Market Composite Index fell by 2.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 4 percent compared to the previous week.

The unadjusted Refinance Index decreased by 5 percent from the previous week to its lowest level since December 2000. The refinance share of mortgage activity decreased to its lowest level since August 2008, 35.3 percent of total applications, from 35.7 percent the previous week.

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

The FHA share of total applications decreased to 9.9 percent from 10.3 percent the week prior. The VA share of total applications increased to 9.9 percent from 9.8 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

"Rates slipped slightly over the week as concerns over U.S. trade policy and global growth sent some investors back to safer U.S. Treasuries," said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. "Minutes from the most recent Federal Open Market Committee meeting also yielded a more dovish tone, which added to the downward pressure in rates. Our 30-year fixed mortgage rate decreased two basis points over the week to 4.84 percent as a result. Both purchase and refinance activity decreased despite the drop in rates, part of which was due to slowing activity before the Memorial Day holiday."

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.84 percent from 4.86 percent, with points decreasing to 0.47 from 0.52 (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) decreased to 4.73 percent from 4.81 percent, with points decreasing to 0.36 from 0.42 (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 4.85 percent from 4.90 percent, with points increasing to 0.88 from 0.85 (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 decreased to 4.24 percent from 4.31 percent, with points decreasing to 0.51 from 0.56 (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 4.11 percent from 4.12 percent, with points increasing to 0.62 from 0.46 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 6.7 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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