Mortgage Applications Dip in MBA Weekly Survey

Mortgage applications decreased slightly from one week earlier as key interest rates fell back below 4 percent, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending November 1. 

The Market Composite Index decreased by 0.1 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 2 percent from the previous week and was 144 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 59.5 percent of total applications from 58.0 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 7 percent higher than the same week one year ago.

The FHA share of total applications decreased to 11.8 percent from 12.0 percent the week prior. The VA share of total applications increased to 12.0 percent from 11.8 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

“U.S. Treasury yields once again exhibited some intraweek volatility before declining sharply toward the end of the week,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “As a result, mortgage rates decreased, with the 30-year fixed rate falling below 4 percent again. In response to the lower rates, refinance applications climbed 2 percent, as homeowners with larger loan balances helped to keep the average refinance loan size elevated. Purchase applications fell slightly last week but remained almost 7 percent higher than a year ago.”

Kan added with persistent supply constraints in the entry-level price range, “there’s evidence that high-end homebuyers are more active this fall. The average loan size for purchase applications increased to its highest level since May.”  

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.98 percent from 4.05 percent, with points unchanged at 0.37 (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) decreased to 3.97 percent from 4.01 percent, with points decreasing to 0.24 from 0.30 (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 decreased to 3.79 percent from 3.83 percent, with points decreasing to 0.21 from 0.28 (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 decreased to 3.38 percent from 3.40 percent, with points decreasing to 0.31 from 0.36 (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 was unchanged at 3.43 percent, with points decreasing to 0.21 from 0.23 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity remained unchanged at 5.2 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.