Applications Finish Year Down
Mortgage applications fell by nearly 3 percent over the two-week holiday period as key interest rates held steady, the Mortgage Bankers Association reported this morning.
The MBA Weekly Applications Survey for the two-week period ending Dec. 29 reported its Market Composite Index fell by 2.8 percent. On an unadjusted basis, the Index decreased by 42 percent compared to two weeks ago.
The Refinance Index decreased 7 percent from two weeks ago. The refinance share of mortgage activity increased to 52.0 percent of total applications from 51.8 percent the previous week.
The seasonally adjusted Purchase Index increased by 1 percent from two weeks earlier. The unadjusted Purchase Index decreased by 40 percent compared with two weeks ago and was 3 percent higher than the same week one year ago.
The FHA share of total applications increased to 10.4 percent from 10.3 percent the week prior. The VA share of total applications increased to 11.2 percent from 10.6 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.
The results include adjustments to account for the Christmas holiday. While the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only.
“With the passage of the tax reform bill, there were increased expectations of stronger economic growth, which pushed rates higher,” said MBA Economist Joel Kan. “The 30-year fixed mortgage rate in our survey finished 9 basis points higher than two weeks ago, its highest level since April 2017, causing a 7 percent decrease in refinance activity over the two-week period. Applications for home purchase loans increased 1 percent over the last two weeks, and for the most recent week, were 2.8 percent higher than the same week a year ago.”
MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged from the week prior at 4.25 percent, with points increasing to 0.36 from 0.35 (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 4.13 percent from 4.21 percent, with points increasing to 0.21 from 0.20 (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 4.17 percent from 4.15 percent, with points increasing to 0.40 from 0.37 (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 decreased to 3.65 percent from 3.66 percent, with points decreasing to 0.34 from 0.37 (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 mortgage decreased to 3.40 percent from 3.56 percent, with points increasing to 0.73 from 0.46 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The ARM share of activity decreased to 5.3 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.
