Mortgage Applications Up 3rd Straight Week in MBA Weekly Survey
Mortgage applications increased for the third straight week, driven by a surge in purchase applications, despite a jump in key interest rates, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending January 20.
This week’s results included an adjustment for the Martin Luther King Jr. holiday.
The Market Composite Index increased by 4.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 5 percent compared to the previous week.
The Refinance Index increased by 0.2 percent from the previous week. The refinance share of mortgage activity decreased to 50.0 percent of total applications, the lowest level since July 2015, from 53.0 percent the previous week.
The seasonally adjusted Purchase Index increased by 6 percent from one week earlier to its highest level since June. The unadjusted Purchase Index increased by 2 percent compared to the previous week and was 0.1 percent higher than the same week one year ago.
The average loan size for purchase applications increased to $309,200, its highest level since December 16.
“Refinance mortgage applications held steady last week after accounting for the MLK holiday, even as interest rates for the 30-year fixed rate mortgage rose 8 basis points to 4.35 percent,” said Lynn Fisher, MBA vice president of research and economics. “While this was the first rate increase in January, rates remain about 10 basis points lower than four weeks ago. Although it is still early in the home-buying season, purchase activity remains on par with a year ago, suggesting that recent wage growth of nearly 3 percent is helping to offset the increase in interest rates. This trend is also consistent with other reports of home-buying activity.”
MBA said the FHA share of total applications increased to 13.6 percent from 13.1 percent the week prior. The VA share of total applications increased to 12.2 percent from 12.1 percent the week prior. The USDA share of total applications remained unchanged from 0.9 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,000 or less) increased to 4.35 percent from 4.27 percent, with points decreasing to 0.30 from 0.39 (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 $424,000) increased to 4.28 percent from 4.22 percent, with points decreasing to 0.31 from 0.36 (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 4.19 percent from 4.10 percent, with points increasing to 0.35 from 0.28 (including the 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 3.57 percent from 3.51 percent, with points decreasing to 0.28 from 0.34 (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 decreased to 3.41 percent from 3.44 percent, with points increasing to 0.30 from 0.21 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.
The ARM share of activity remained unchanged at 5.7 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.
