Mortgage Applications Down in MBA Weekly Survey

MBA NewsLink Staff

September 25, 2019

Mortgage applications fell last week as interest rates crept back above 4 percent, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending September 20.

The Market Composite Index decreased by 10.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 11 percent compared to the previous week.

The unadjusted Refinance Index decreased by 15 percent from the previous week and was 104 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 54.9 percent of total applications from 57.9 percent the previous week.

The seasonally adjusted Purchase Index decreased by 3 percent from one week earlier. The unadjusted Purchase Index decreased by 4 percent compared to the previous week and was 9 percent higher than the same week one year ago.

The FHA share of total applications increased to 11.4 percent from 10.9 percent the week prior. The VA share of total applications increased to 13.1 percent from 12.7 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

"U.S. Treasury yields trended downward over the course of last week, as the Federal Reserve meeting highlighted the elevated uncertainty in the economic outlook. However, despite falling yields, mortgage rates ticked up again and have risen 20 basis points over the past two weeks," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. "The increase in rates led to fewer refinances, and activity has now dropped 17 percent over the last two weeks."

Kan noted purchase applications also decreased, likely related to the two-week jump in rates, but still remained 9 percent higher than last year. "The recent data on increased existing home sales and new residential construction points to the underlying strength in the purchase market this fall," he said.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.02 percent from 4.01 percent, with points increasing to 0.38 from 0.37 (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) decreased to 4.00 percent from 4.01 percent, with points decreasing to 0.26 from 0.29 (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 increased to 3.90 percent from 3.89 percent, with points decreasing to 0.23 from 0.30 (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 increased to 3.46 percent from 3.42 percent, with points unchanged at 0.36 (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 3.39 percent from 3.54 percent, with points remaining unchanged at 0.29 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity increased to 5.1 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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