Mortgage Applications Dip MBA Weekly Applications Survey

MBA NewsLink Staff

August 21, 2019

Mortgage applications fell from one week earlier, even as the 30-year fixed mortgage rate fell even further, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending August 16.

The Market Composite Index decreased by 0.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 2 percent compared to the previous week.

The unadjusted Refinance Index increased by 0.4 percent from the previous week and was 180 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 62.7 percent of total applications from 61.4 percent the previous week.

The seasonally adjusted Purchase Index decreased by 4 percent from one week earlier. The unadjusted Purchase Index decreased by 5 percent compared to the previous week and was 5 percent higher than the same week one year ago.

The FHA share of total applications increased to 9.7 percent from 9.5 percent the week prior. The VA share of total applications decreased to 11.6 percent from 12.2 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.

"In a week where worries over global economic growth drove U.S. Treasury yields 13 basis points lower, the 30-year fixed mortgage rate decreased just three basis points. As a result, the refinance index saw only a slight increase but remained at its highest level since July 2016," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. "The small moves in rates and refinancing are potentially signs that lenders may be approaching capacity constraints as they continue to deal with the largest wave of refinance activity in three years. The refinance share of applications, at almost 63 percent, was also at its highest level since September 2016."

Kan added lower mortgage rates have yet to lead to a notable rise in homebuyer demand, noting purchase applications fell more than 3 percent, but were still 5 percent higher than a year ago.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.90 percent from 3.93 percent, with points unchanged at 0.35 (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 $484,350) remained unchanged at 3.88 percent, with points unchanged at 0.24 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA increased to 3.87 percent from 3.81 percent, with points increasing to 0.32 from 0.29 (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 3.30 percent from 3.28 percent, with points decreasing to 0.33 from 0.34 (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 3.35 percent from 3.43 percent, with points increasing to 0.41 from 0.35 (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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