Applications Up in MBA Weekly Survey

MBA NewsLink Staff

September 19, 2018

Mortgage applications increased for just the second time in the past two months even as key interest rates hit a seven-year high, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending September 14.

Last week's results included an adjustment for the Labor Day holiday.

The Market Composite Index increased by 1.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 12 percent compared to the previous week.

The (unadjusted) Refinance Index increased by 4 percent from the previous week. The refinance share of mortgage activity increased to 39.0 percent of total applications from 37.8 percent the previous week.

The seasonally adjusted Purchase Index increased by 0.3 percent from one week earlier. The unadjusted Purchase Index increased by 9 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 10.6 percent from 10.4 percent the week prior. The VA share of total applications decreased to 10.0 percent from 10.5 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

"In the first full week following Labor Day, applications bounced back," said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. "Purchase applications slowed earlier in the summer, but have shown year-over-year increases for the past five weeks."

Kan also noted a 3.7 percent increase in refinance applications, despite the 30-year fixed rate increase. "As markets received various pieces of data indicating economic strength such as wage growth, inflation and jobless claims, Treasury rates were up over the week," he said.

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 April 2011, 4.88 percent, from 4.84 percent, with points decreasing to 0.44 from 0.46 (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 4.77 percent from 4.72 percent, with points decreasing to 0.28 from 0.47 (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 increased to 4.90 percent from 4.84 percent, with points increasing to 0.73 from 0.51 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 4.30 percent from 4.28 percent, with points increasing to 0.49 from 0.47 (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 4.17 percent from 4.07 percent, with points decreasing to 0.29 from 0.30 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 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.

Share this article