Applications Down Again in MBA Weekly Survey

MBA NewsLink Staff

September 12, 2018


With mortgage rates on the rise, a sharp drop in refinance applications more than offset a modest increase in purchase applications, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending September 7.

The week's results include an adjustment for the Labor Day holiday. The drop marked the eighth drop in applications in nine weeks.

The Market Composite Index decreased by 1.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 13 percent compared to the previous week.

The (unadjusted) Refinance Index decreased by 6 percent from the previous week to its lowest level since December 2000. The refinance share of mortgage activity decreased to 37.8 percent of total applications from 38.9 percent the previous week.

The seasonally adjusted Purchase Index increased by 1 percent from one week earlier. The unadjusted Purchase Index decreased by 11 percent compared to the previous week but was 4 percent higher than the same week one year ago.

The FHA share of total applications increased to 10.4 percent from 10.2 percent the week prior. The VA share of total applications increased to 10.5 percent from 10.0 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

"As mortgage rates increased to a five-week high, the refinance index decreased to its lowest level since the end of 2000," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. "The drop in refinance activity pushed overall mortgage applications lower last week. Treasury rates increased through the week, mainly in response to stronger data on the manufacturing sector, unemployment claims and signs of faster wage growth."

MBA reported 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 4.80 percent, with points increasing to 0.46 from 0.43 (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 4.72 percent from 4.67 percent, with points increasing to 0.47 from 0.30 (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 4.84 percent from 4.79 percent, with points decreasing to 0.51 from 0.69 (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 increased to 4.28 percent from 4.23 percent, with points increasing to 0.47 from 0.45 (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 decreased to 4.07 percent from 4.09 percent, with points decreasing to 0.30 from 0.31 (including origination fee) for 80 percent LTV loans. The effective rate decreased 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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