Mortgage Applications Increase in MBA Weekly Survey

MBA NewsLink Staff

May 22, 2019

Mortgage applications increased last week as key interest rates fell for the fourth consecutive week, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending May 17.

The Market Composite Index increased by 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 2 percent compared to the previous week.

The unadjusted Refinance Index increased by 8 percent from the previous week. The refinance share of mortgage activity increased to 40.5 percent of total applications from 37.9 percent the previous week.

The seasonally adjusted Purchase Index decreased by 2 percent from one week earlier. The unadjusted Purchase Index decreased by 3 percent compared to the previous week and was 7 percent higher than the same week one year ago.

The FHA share of total applications decreased to 9.4 percent from 10.1 percent the week prior. The VA share of total applications increased to 11.0 percent from 10.6 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

"Mortgage rates fell for the fourth straight week, with the 30-year fixed rate mortgage hitting its lowest level since January 2018, leading to a rebound in refinances," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. "The refinance index increased 8 percent to its highest level in over a month, and once again there was an increase in average refinance loan sizes, as borrowers with larger balances responded accordingly to lower rates."

Kan noted purchase activity declined again, but remained 7 percent higher than a year ago. "We're keeping a close eye on whether there may be some adverse effects of the ongoing global trade disputes on overall demand," he said. "Some potential homebuyers may be delaying their home search until there's more certainty."

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.33 percent from 4.40 percent, with points increasing to 0.43 from 0.40 (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 4.24 percent, with points increasing to 0.35 from 0.27 (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 4.34 percent from 4.32 percent, with points decreasing to 0.47 from 0.49 (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 3.78 percent, with points decreasing to 0.40 from 0.43 (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 3.57 percent from 3.82 percent, with points decreasing to 0.37 from 0.44 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity increased to 6.8 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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