Applications Down Slightly in MBA Weekly Survey

Mortgage applications fell just slightly last week, as a rise in purchase applications nearly offset a decrease in refinancings, the Mortgage Bankers Association reported this morning in its Weekly Applications Survey for the week ending Aug. 31.

The decrease, the seventh in eight weeks, came despite interest rates falling to their lowest level in a month.

The overall Market Composite Index decreased by just 0.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 2 percent compared to the previous week.

The Refinance Index decreased by 1 percent from the previous week. The refinance share of mortgage activity increased to 38.9 percent of total applications from 38.7 percent the previous week.

The seasonally adjusted Purchase Index increased by 0.9 percent from one week earlier. The unadjusted Purchase Index decreased by 2 percent compared to the previous week but was 2 percent higher than the same week one year ago.

The FHA share of total applications remained unchanged at 10.2 percent from the week prior. The VA share of total applications decreased to 10.0 percent from 10.5 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.

“Mortgage application volume was little changed as mortgage rates remain within the narrow range they have been in the past several months,” said MBA Chief Economist Mike Fratantoni. “The job market remains quite strong, supporting purchase demand, which is 2 percent higher than last year at this time. However, home prices, while decelerating, continue to rise faster than household income. Average loan size for purchase loans dropped to its lowest level since December 2017, a sign that first-time buyers are finding a way into the market.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.80 percent from 4.78 percent, with points decreasing to 0.43 from 0.46 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) decreased to 4.67 percent from 4.68 percent, with points remained unchanged at 0.30 (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 4.79 percent from 4.77 percent, with points decreasing to 0.69 from 0.75 (including 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 decreased to 4.23 percent from 4.24 percent, with points decreasing to 0.45 from 0.48 (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 4.09 percent from 3.95 percent, with points decreasing to 0.31 from 0.34 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 6.1 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.