Mortgage Applications Decrease in MBA Weekly Survey

Mortgage applications fell from one week earlier even as key interest rates dipped back below 4 percent, the Mortgage Bankers Association reported this week in its Weekly Mortgage Applications Survey for the week ending November 15.

This week’s results include an adjustment for the Veterans Day holiday.

The Market Composite Index decreased by 2.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 14 percent compared to the previous week. 

The unadjusted Refinance Index decreased by 8 percent from the previous week and was 152 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 59.5 percent of total applications from 61.9 percent the previous week.

The seasonally adjusted Purchase Index increased by 7 percent from one week earlier. The unadjusted Purchase Index decreased by 8 percent compared to the previous week and was 7 percent higher than the same week one year ago.

The FHA share of total applications decreased to 13.0 percent from 13.1 percent the week prior. The VA share of total applications increased to 12.9 percent from 12.7 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.

“U.S. and China trade anxieties and protests in Hong Kong pulled U.S. Treasuries lower last week, and the 30-year fixed mortgage rate followed the same path, dipping below 4 percent,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Despite lower rates, mortgage applications decreased 2.2 percent, driven by an 8 percent slide in refinance activity. Rates have stayed in the same narrow range of around 4 percent since July, so we may be starting to see the expected slowdown in refinancing as the pool of eligible homeowners shrinks.”

“Purchase applications were 7 percent higher than a year ago, which adds another solid data point to the recent increases in new home sales and housing starts,” Kan added. “There may be signs that housing inventory is starting to meaningfully rise, which will help with affordability and provide more choices for potential homebuyers.” 

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.99 percent from 4.03 percent, with points increasing to 0.33 from 0.31 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to 3.93 percent from 3.98 percent, with points increasing to 0.28 from 0.22 (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 decreased to 3.80 percent from 3.85 percent, with points increasing to 0.32 from 0.28 (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 3.40 percent from 3.43 percent, with points increasing to 0.31 from 0.28 (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 3.51 percent from 3.40 percent, with points increasing to 0.23 from 0.17 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 4.6 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.