Mortgage Applications Plummet in MBA Weekly Survey
TRID giveth; TRID taketh away.
Mortgage applications fell sharply from one week earlier, erasing last week’s gains, the Mortgage Bankers Association reported in its Weekly Mortgage Applications Survey for the week ending October 9.
The Market Composite Index fell by 27.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 27 percent compared to the previous week.
The Refinance Index fell by 23 percent from the previous week. The refinance share of mortgage activity increased to 61.2 percent of total applications from 57.4 percent the previous week.
The seasonally adjusted Purchase Index fell by 34 percent from one week earlier. The unadjusted Purchase Index decreased by 34 percent compared to the previous week and was 1 percent lower than the same week one year ago.
“Application volume plummeted last week in the wake of implementation of new TILA-RESPA Integrated Disclosures, which caused lenders to significantly revamp their business processes, and as a result dramatically slowed the pace of activity,” said MBA Chief Economist Mike Fratantoni. “The prior week’s results evidently pulled forward much of the volume that would have more naturally taken place into this week. Purchase volume for the week was below last year’s pace, the first year over year decrease since February, while refinance volume dropped sharply even with little change in mortgage rates.”
The FHA share of total applications decreased to 12.6 percent from 12.7 percent the week prior. The VA share of total applications increased to 11.5 percent from 9.2 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.7 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 3.99 percent, with points increasing to 0.53 from 0.46 (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 $417,000) remained unchanged at 3.89 percent, with points increasing to 0.41 from 0.25 (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 3.82 percent from 3.80 percent, with points increasing to 0.39 from 0.35 (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 decreased to 3.20 percent from 3.24 percent, with points increasing to 0.39 from 0.38 (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 increased to 3.00 percent from 2.96 percent, with points increasing to 0.46 from 0.32 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The ARM share of activity decreased to 7.5 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.
