Mortgage Applications Down in MBA Weekly Survey

MBA NewsLink Staff

July 10, 2019


Mortgage applications decreased during a holiday-shortened week, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending July 5.

This week's results include an adjustment for the Fourth of July holiday.

The Market Composite Index fell by 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 22 percent compared to the previous week.

The unadjusted Refinance Index decreased by 7 percent from the previous week and was 88 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 48.7 percent of total applications from 51.0 percent the previous week.

The seasonally adjusted Purchase Index increased by 2 percent from one week earlier. The unadjusted Purchase Index decreased by 18 percent compared to the previous week and was 6 percent higher than the same week one year ago.

The FHA share of total applications remained unchanged from 10.1 percent the week prior. The VA share of total applications increased to 13.2 percent from 12.8 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.6 percent the week prior.

"Mortgage applications were down slightly, even after adjusting for the July 4 holiday, as we saw opposing moves in purchase and refinance applications over the week," said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. "Purchase applications increased from the previous week and were up 5 percent from a year ago, a continuation of the strong annual growth that we saw in the first half of 2019. Refinance activity decreased over 6 percent and the refinance share of applications fell back below 50 percent, even as the 30-year, fixed-rate declined."

Kan noted borrowers have been less sensitive to low rates as many borrowers have either recently refinanced or are likely waiting for rates to fall even further.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.04 percent from 4.07 percent, with points increasing to 0.37 from 0.36 (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) increased to 4.03 percent from 4.00 percent, with points increasing to 0.27 from 0.25 (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 remained unchanged at 3.97 percent, with points remaining unchanged at 0.30 (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 remained unchanged at 3.42 percent, with points remaining unchanged at 0.32 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages increased to 3.56 percent from 3.46 percent, with points increasing to 0.28 from 0.26 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 5.3 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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