Mortgage Applications Down Again in MBA Weekly Survey

MBA NewsLink Staff

April 24, 2019

Mortgage applications fell for the third straight as interest rates continued to edge higher, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending April 19.

The Market Composite Index decreased by 7.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 6 percent compared to the previous week.

The (unadjusted) Refinance Index decreased by 11 percent from the previous week. The refinance share of mortgage activity decreased to 39.4 percent of total applications from 41.5 percent the previous week.

The seasonally adjusted Purchase Index decreased 4 percent after reaching a nine-year high the previous week. The unadjusted Purchase Index decreased by 3 percent compared to the previous week and was 3 percent higher than the same week one year ago.

The FHA share of total applications increased to 9.9 percent from 9.4 percent the week prior. The VA share of total applications decreased to 11.3 percent from 11.6 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

"The 30-year fixed mortgage rate has risen 10 basis points in three weeks, and is now at its highest level in over a month," said MBA Chief Economist Mike Fratantoni. "Borrowers remain extremely sensitive to rate changes, which is why there has been a 28 percent drop in refinance applications over this three-week period. Purchase activity also declined, but remains almost 3 percent higher than a year ago. Borrowing costs have recently drifted higher because of ebbing geopolitical concerns, as well as signs of strengthening in the U.S. economy, including the recent data pointing to robust retail sales."

Fratantoni noted the strong economy and job market is "keeping buyer interest high, but rising mortgage rates could add pressure to the budgets of some would-be buyers."

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.46 percent from 4.44 percent, with points increasing to 0.44 from 0.42 (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 $484,350) increased to 4.35 percent from 4.33 percent, with points increasing to 0.25 from 0.23 (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 4.49 percent from 4.43 percent, with points increasing to 0.57 from 0.56 (including the 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 3.87 percent from 3.84 percent, with points decreasing to 0.44 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 increased to 3.92 percent from 3.88 percent, with points increasing to 0.28 from 0.19 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased 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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