Applications Take Hit in MBA Weekly Survey

Mortgage applications fell across the board as key interest rates edged up to levels not seen since 2010, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending November 2.

The Market Composite Index decreased by 4.0 percent on a seasonally adjusted basis from one week earlier to its lowest level since December 2014. On an unadjusted basis, the Index decreased by 2 percent compared to the previous week.

The (unadjusted) Refinance Index decreased by 3 percent from the previous week. The refinance share of mortgage activity decreased to 39.1 percent of total applications from 39.4 percent the previous week.

The seasonally adjusted Purchase Index decreased by 5 percent from one week earlier to its lowest level since November 2016. The unadjusted Purchase Index decreased by 1 percent compared to the previous week and was 0.2 percent lower than the same week one year ago.

The FHA share of total applications decreased to 10.1 percent from 10.3 percent the week prior. The VA share of total applications increased to 10.1 percent from 9.8 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

“Application activity decreased over the week for both purchase and refinance applications, with the overall market index down to its lowest level since December 2014,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasts. “It’s evident that housing inventory shortages continue to impact prospective home buyers this fall.”

MBA said the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 5.15 percent–the highest rate since April 2010–from 5.11 percent, with points increasing to 0.51 from 0.50 (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 $453,100) increased to 4.97 percent from 4.94 percent, with points decreasing to 0.27 from 0.28 (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 5.15 percent from 5.08 percent, with points increasing to 0.64 from 0.62 (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 4.55 percent, with points remaining unchanged at 0.51 (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 4.36 percent from 4.33 percent, with points decreasing to 0.35 from 0.42 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The ARM share of activity increased to 7.8 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.