Rates Tick Up, Applications Tick Down in MBA Weekly Survey

A slight uptick in the 30-year fixed rate kept purchase applications on the sidelines last week, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending October 16. 

The Market Composite Index decreased by 0.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 1 percent compared to the previous week. 

The unadjusted Refinance Index increased by 0.2 percent from the previous week and was 74 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 66.1 percent of total applications from 65.6 percent the previous week.

The seasonally adjusted Purchase Index decreased by 2 percent from one week earlier. The unadjusted Purchase Index decreased by 2 percent compared to the previous week but was 26 percent higher than the same week one year ago.

The FHA share of total applications increased to 11.8 percent from 10.7 percent the week prior. The VA share of total applications decreased to 12.6 percent from 13.4 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.

“Despite the uptick in rates, refinance activity held steady, with FHA refinance applications posting a 17.6 percent increase, helping to offset declines in the other loan types,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Homebuyer demand remains strong this fall, but purchase applications did decrease 2 percent, with both conventional and government purchase activity taking a step back. Given the ongoing housing market recovery and low rate environment, both purchase and refinance applications remained robust compared to a year ago, rising 26 percent and 74 percent, respectively.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.02 percent from 3.00 percent, with points increasing to 0.36 from 0.32 (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 $510,400) increased to 3.33 percent from 3.30 percent, with points decreasing to 0.30 from 0.35 (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 3.12 percent, with points remaining unchanged at 0.35 (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 increased to 2.61 percent from 2.59 percent, with points decreasing to 0.31 from 0.32 (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 increased to 2.86 percent from 2.63 percent, with points remaining unchanged at 0.58 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 1.9 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.