Applications Fall Back in MBA Weekly Survey

Mortgage applications fell last week, largely giving back what they’d gained the week before, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending September 15.

Last week’s results included an adjustment for the Labor Day holiday.

The Market Composite Index decreased by 9.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 12 percent compared to the previous week.

The Refinance Index decreased by 9 percent from the previous week. The refinance share of mortgage activity increased to 52.1 percent of total applications from 51.0 percent the previous week.

The seasonally adjusted Purchase Index decreased by 11 percent from one week earlier. The unadjusted Purchase Index increased by 10 percent compared to the previous week and was 2 percent higher than the same week one year ago.

“The decline in application volume last week was influenced by a rise in rates, the ongoing impact of the hurricanes on Florida and Texas, and a potential slowdown following the Labor Day holiday week,” said Joel Kan MBA Associate Vice President of Industry Surveys and Forecasting. “Applications decreased as Treasury yields rose 11 basis points over the week with news of higher than expected inflation and some market relief regarding the effect of the two major hurricanes in Texas and Florida. Coming off Labor Day week, on a seasonally adjusted basis, purchase applications decreased almost 11 percent. Even still, purchase activity was 1.9 percent higher than the same week a year ago, but this marks the lowest YOY growth rate since April.”

Kan noted the rest of the U.S., excluding Texas and Florida, saw a 13 percent increase in applications on an unadjusted basis. Florida had a 22 percent decrease in overall mortgage application activity over the week. Texas rebounded from Harvey’s impact, showing a 27 percent increase in applications last week.

The FHA share of total applications remained unchanged at 9.9 percent from the week prior. The VA share of total applications decreased to 10.1 percent from 10.3 percent the week prior. The USDA share of total applications remained unchanged at 0.7 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.04 percent from 4.03 percent, with points remaining unchanged at 0.40 (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) decreased to 3.99 percent from 4.00 percent, with points decreasing to 0.23 from 0.24 (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 increased to 3.97 percent from 3.94 percent, with points remaining unchanged at 0.34 (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 3.35 percent from 3.30 percent, with points increasing to 0.44 from 0.39 (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 3.30 percent from 3.17 percent, with points decreasing to 0.34 from 0.36 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 6.8 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.