Mortgage Applications Drop Again in MBA Weekly Survey
Mortgage applications fell for the second week in a row as key mortgage rates edged up, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending January 25.
The week’s results include an adjustment for the Martin Luther King Jr. Day holiday.
The Market Composite Index decreased by 3.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 10 percent compared to the previous week.
The unadjusted Refinance Index decreased by 6 percent from the previous week. The refinance share of mortgage activity decreased to 42.0 percent of total applications from 44.5 percent the previous week.
The seasonally adjusted Purchase Index decreased by 2 percent from one week earlier. The unadjusted Purchase Index decreased by 6 percent compared to the previous week and was 7 percent lower than the same week one year ago.
The FHA share of total applications remained unchanged from 10.5 percent the week prior. The VA share of total applications increased to 10.7 percent from 10.3 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.
“Mortgage applications for purchase and refinances were lower over the past week, as rates nudged higher,” said MBA Associate Vice President of Industry Surveys and Forecasting Joel Kan. “After two weeks of decreases, the purchase index still remained roughly 6 percent above its long-run average, which is good news with the spring buying and selling season almost underway. Despite ongoing supply and affordability constraints, the healthy job market and underlying demographic fundamentals both point to gradual purchase growth in the coming months.”
Kan noted refinance activity had seen a small resurgence in the past few weeks, “but there still remains only a small share of borrowers left to gain from rates at the current levels.”
MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.76 percent from 4.75 percent, with points increasing to 0.47 from 0.44 (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 $484,350) increased to 4.60 percent from 4.59 percent, with points decreasing to 0.24 from 0.25 (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 4.77 percent from 4.82 percent, with points decreasing to 0.58 from 0.62 (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 4.16 percent from 4.12 percent, with points decreasing to 0.46 from 0.53 (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 4.14 percent from 4.12 percent, with points decreasing to 0.37 from 0.42 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.
The ARM share of activity decreased to 7.9 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.
