Applications Bounce Back in MBA Weekly Survey

MBA NewsLink Staff

October 24, 2018

Mortgage applications rebounded solidly from one week earlier as key interested rates continued to hover at seven-year highs, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending October 19.

The previous week's results did not include an adjustment for the Columbus Day holiday.

The Market Composite Index increased by 4.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 5 percent compared to the previous week.

The (unadjusted) Refinance Index increased by 10 percent from the previous week. The refinance share of mortgage activity increased to 39.8 percent of total applications from 38.1 percent the previous week.

The seasonally adjusted Purchase Index increased by 2 percent from one week earlier. The unadjusted Purchase Index increased by 2 percent compared to the previous week and was 0.2 percent higher than the same week one year ago.

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

"Mortgage application activity rebounded the week following the Columbus Day holiday, but both purchase and refinance levels remained lower than where they were two weeks ago," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. "The holiday impacted refinance applications more than purchases, as refinances rebounded almost 10 percent. Meanwhile, purchase applications increased two percent over the prior week but were still four percent lower than two weeks ago--a sign that both the jump in mortgage rates and tight inventory continue to hold back application activity."

MBA reported 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 February 2011, 5.11 percent, from 5.10 percent, with points decreasing to 0.52 from 0.55 (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 5.01 percent from 4.98 percent, with points decreasing to 0.28 from 0.34 (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 5.07 percent from 4.99 percent, with points decreasing to 0.61 from 0.69 (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 remained unchanged at 4.50 percent, with points increasing to 0.55 from 0.54 (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 rose to its highest level since the series began in 2011, 4.47 percent, from 4.34 percent, with points increasing to 0.37 from 0.35 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 7.0 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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