Mortgage Applications Down; So are Rates in MBA Weekly Survey

MBA NewsLink Staff

February 06, 2019

Mortgage applications fell for the third consecutive week despite key interest rates falling to 10-month lows, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending February 1.

The previous week's results included an adjustment for the Martin Luther King Jr. Day holiday.

The Market Composite Index decreased by 2.5 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 0.3 from the previous week. The refinance share of mortgage activity decreased to 41.6 percent of total applications from 42.0 percent the previous week.

The seasonally adjusted Purchase Index decreased by 5 percent from one week earlier. The unadjusted Purchase Index increased by 13 percent compared to the previous week and was 2 percent lower than the same week one year ago.

The FHA share of total applications remained unchanged from 10.5 percent the week prior. The VA share of total applications decreased to 10.0 percent from 10.7 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

"Mortgage rates for all loan types declined last week, with the 30-year fixed mortgage rate falling seven basis points to 4.69 percent, the lowest rate since April 2018," said Joel Kan, MBA Associate Vice President of Industry Surveys and Forecasting. "Despite more favorable borrowing costs, and after a three-week surge in activity, purchase applications have slowed over the past two weeks, and are now almost 2 percent lower than a year ago."

However, Kan noted moderating price gains and the strong job market, including evidence of faster wage growth, should help purchase growth going forward. "Refinance applications saw a very slight increase compared to the previous week, despite the broad decline in rates," he said.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.69 percent from 4.76 percent, with points decreasing to 0.45 from 0.47 (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) decreased to 4.50 percent from 4.60 percent, with points increasing to 0.28 from 0.24 (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 decreased to 4.70 percent from 4.77 percent, with points decreasing to 0.57 from 0.58 (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 decreased to 4.11 percent from 4.16 percent, with points increasing to 0.47 from 0.46 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages decreased to 4.04 percent from 4.14 percent, with points remaining unchanged from 0.37 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 7.8 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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