Applications Back Up in MBA Weekly Survey

Mortgage applications rose for the third time in the past four weeks as key interest rates rose to their highest mark in more than a month, the Mortgage Bankers Association reported this morning.

The Market Composite Index increased by 1.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 1 percent compared to the previous week.

The Refinance Index decreased by 0.4 percent from the previous week. The refinance share of mortgage activity decreased to 44.9 percent of total applications from 45.6 percent the previous week.

The seasonally adjusted Purchase Index increased by 3 percent from one week earlier. The unadjusted Purchase Index increased by 3 percent compared to the previous week and was 6 percent higher than the same week one year ago.

“Purchase applications reached their highest level in two weeks based on ongoing strength in employment and other factors that contribute to a healthy housing market, such as consumer confidence and sentiment,” said MBA Associate Vice President of Economic Forecasting Joel Kan. “The 30-year fixed mortgage rate increased to its highest level since May, following a jump in the U.S. 10-year Treasury, which was driven mainly by news that European economies have strengthened and the ECB may be poised to tighten its accommodative policies. Refinance applications fell slightly in response and the refi index remained close to its 2017 year to date average.”

MBA reported the FHA share of total applications decreased to 10.2 percent from 10.3 percent the week prior. The VA share of total applications remained unchanged at 10.3 percent from the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to its highest level since May, 4.20 percent, from 4.13 percent, with points decreasing to 0.31 from 0.32 (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 $424,100) increased to its highest level since May, 4.10 percent, from 4.09 percent, with points increasing to 0.23 from 0.20 (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 4.04 percent from 4.02 percent, with points decreasing to 0.33 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since May, 3.43 percent, from 3.39 percent, with points decreasing to 0.32 from 0.33 (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, 3.37 percent, from 3.31 percent, with points decreasing to 0.22 from 0.25 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 7.2 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.