Mortgage Applications Dip Again in MBA Weekly Applications Survey

MBA NewsLink Staff

September 04, 2019

Mortgage applications fell again from one week earlier despite another decrease in mortgage interest rates, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending August 30.

The Market Composite Index decreased by 3.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 4 percent compared to the previous week.

The unadjusted Refinance Index decreased by 7 percent from the previous week but was 152 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 60.4 percent of total applications from 62.4 percent the previous week.

The seasonally adjusted Purchase Index increased by 4 percent from one week earlier. The unadjusted Purchase Index increased by 1 percent compared to the previous week and was 5 percent higher than the same week one year ago.

The FHA share of total applications decreased to 10.2 percent from 10.5 percent the week prior. The VA share of total applications increased to 11.3 percent from 9.9 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.

"Ongoing trade tensions between the U.S. and China led to volatile, yet declining Treasury rates last week, causing the 30-year fixed mortgage rate to fall to 3.87 percent, its lowest level since November 2016," said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. "Despite lower borrowing costs, refinances were down from its recent peak two weeks ago, but still remained over 150 percent higher than last August, when rates were almost a percentage point higher."

Kan noted while consumers continue to act on lower rates, "the volatility in the market is likely leading some borrowers to pause refinancing and buying decisions."

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.87 percent from 3.94 percent, with points decreasing to 0.34 from 0.38 (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 3.94 percent from 3.89 percent, with points decreasing to 0.24 from 0.26 (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 3.80 percent, with points decreasing to 0.32 from 0.33 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.29 percent from 3.31 percent, with points decreasing to 0.32 from 0.33 (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 3.40 percent from 3.42 percent, with points decreasing to 0.27 from 0.39 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 5.7 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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