Applications Up Again in MBA Weekly Survey

Mortgage applications rose for the second straight week as key interest rates fell back toward 5 percent, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending November 30.

The results for the week ending November 23, 2018 included an adjustment for the Thanksgiving holiday.

The Market Composite Index increased by 2.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 42 percent compared to the previous week.

The (unadjusted) Refinance Index increased y b6 percent from the previous week. The refinance share of mortgage activity increased to 40.4 percent of total applications from 37.9 percent the previous week.

The seasonally adjusted Purchase Index increased by 1 percent from one week earlier. The unadjusted Purchase Index increased by 36 percent compared to the previous week and was 0.2 percent higher than the same week one year ago.

The FHA share of total applications increased to 10.2 percent from 9.6 percent the week prior. The VA share of total applications increased to 10.0 percent from 9.9 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

“Treasury rates continued to slide last week, driven mainly by concerns over slowing global economic growth and U.S. and China trade uncertainty,” said MBA Associate Vice President of Economic and Industry Forecasting. “Application activity increased over the week for both purchase and refinance loans, and were 10 percent and 7 percent higher, respectively, than the week before the Thanksgiving holiday. Additionally, we saw a decrease in the average loan size for purchase applications to the lowest since December 2017 ($298,000 from $313,000). This is perhaps an indication that there are fewer jumbo borrowers, or maybe first-time buyers are having better success reaching the market as we close out the year.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 5.08 percent from 5.12 percent, with points decreasing to 0.44 from 0.46 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.

“The 30-year fixed-rate fell for the third week in a row to 5.08 percent and has declined a total of nine basis points over this span,” Kan said.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) increased to 4.89 percent from 4.88 percent, with points decreasing to 0.30 from 0.31 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA decreased to 5.05 percent from 5.11 percent, with points decreasing to 0.62 from 0.63 (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 decreased to 4.50 percent from 4.53 percent, with points increasing to 0.60 from 0.51 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages increased to 4.33 percent from 4.29 percent, with points decreasing to 0.21 from 0.42 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 7.4 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.