Mortgage Applications Down 4th Week in MBA Weekly Survey

Mortgage applications fell for the fourth consecutive week to nine-month lows as key interest rates hit their highest level since January, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending Nov. 11.

The Market Composite Index decreased by 9.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 10 percent compared to the previous week.

The Refinance Index decreased by 11 percent from the previous week to its lowest level since March. The refinance share of mortgage activity decreased to 61.9 percent of total applications from 62.3 percent the previous week.

The seasonally adjusted Purchase Index decreased 6 percent from one week earlier to its lowest level since January. The unadjusted Purchase Index decreased by 10 percent compared to the previous week and was 3 percent higher than the same week one year ago.

“Following the election, mortgage rates saw their biggest week over week increase since the taper tantrum in June 2013, and reached their highest level since January of this year,” said MBA President and CEO David Stevens, CMB. “Investor expectations of faster growth and higher inflation are driving the jump up in rates, and rates have now increased for five of the past six weeks, spurring a commensurate drop in refinance activity.”

MBA reported the FHA share of total applications increased to 12.2 percent from 11.6 percent the week prior. The VA share of total applications increased to 12.6 percent from 12.3 percent the week prior. The USDA share of total applications decreased to 0.6 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) increased to its highest level since January, 3.95 percent, from 3.77 percent, with points increasing to 0.39 from 0.38 (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) increased to its highest level since January, 3.89 percent, from 3.75 percent, with points decreasing to 0.26 from 0.27 (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 its highest level since April, 3.73 percent, from 3.61 percent, with points decreasing to 0.28 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 increased to its highest level since March, 3.15 percent, from 3.03 percent, with points decreasing to 0.29 from 0.38 (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 its highest level since March 2016, 3.11 percent, from 2.92 percent, with points decreasing to 0.42 from 0.47 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 4.7 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.