Purchase Apps Down, Refis Up in MBA Weekly Survey

Mortgage interest rates held steady last week; the Mortgage Bankers Association reported a drop in purchase applications and an increase in refinance applications in its Weekly Mortgage Applications Survey for the week ending July 13.

The week’s results included an adjustment for the Fourth of July holiday.

The Market Composite Index decreased by 2.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 22 percent compared to the previous week.

The Refinance Index increased by 2 percent from the previous week, rebounding slightly from an 18-year low reached the previous week. The refinance share of mortgage activity increased to 36.5 percent of total applications from 34.8 percent the previous week.

The seasonally adjusted Purchase Index decreased by 5 percent from one week earlier. The unadjusted Purchase Index increased by 19 percent compared to the previous week and was 1 percent higher than the same week one year ago.

The FHA share of total applications increased to 10.6 percent from 10.0 percent the week prior. The VA share of total applications decreased to 10.2 percent from 11.3 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

“Mortgage application volume dropped coming out of the July 4 holiday, with purchase volume falling back to the level same level as two weeks prior,” said MBA Chief Economist Mike Fratantoni. “The mix of business changed, with FHA purchase volume increasing as conventional and VA volume decreased. This indicates that more first-time buyers are entering the market, even as the market as a whole continues to be restricted by tight inventories of homes available for sale.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.77 percent from 4.76 percent, with points increasing to 0.46 from 0.43 (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 $453,100) decreased to 4.66 percent from 4.68 percent, with points increasing to 0.30 from 0.24 (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 decreased to 4.78 percent from 4.80 percent, with points decreasing to 0.69 from 0.75 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 4.22 percent from 4.18 percent, with points decreasing to 0.42 from 0.46 (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 4.12 percent from 4.13 percent, with points increasing to 0.39 from 0.36 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged 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.