Mortgage Applications Increase in MBA Weekly Survey

Mortgage applications rose slightly from one week earlier even as key interest rates reached a three-month high, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending October 25. 

The Market Composite Index increased by 0.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 0.3 percent compared to the previous week. 

The unadjusted Refinance Index decreased by 1 percent from the previous week and was 134 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 58.0 percent of total applications from 58.5 percent the previous week.

The seasonally adjusted Purchase Index increased by 2 percent from one week earlier. The unadjusted Purchase Index increased by 2 percent compared to the previous week and was 10 percent higher than the same week one year ago.

The FHA share of total applications decreased to 12.0 percent from 12.1 percent the week prior. The VA share of total applications decreased to 11.8 percent from 13.5 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.

“The 10-year Treasury rate rose slightly last week, as markets expected more progress toward a trade deal between the U.S. and China,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Mortgage rates increased for the second straight week as a result, with the 30-year fixed rate climbing to 4.05 percent–the highest level since the end of July. Mortgage applications were mostly unchanged, with purchase activity rising 2 percent and refinances decreasing less than 1 percent. Purchase applications continued to run at a stronger pace than last year, finishing a robust 10 percent higher than a year ago. Considering how much lower rates are compared to the end of 2018, purchase applications should continue showing solid year-over-year gains.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.05 percent from 4.02 percent, with points decreasing to 0.37 from 0.38 (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 4.01 percent from 3.96 percent, with points remaining unchanged at 0.30 (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 increased to 3.83 percent from 3.79 percent, with points increasing to 0.28 from 0.26 (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 increased to 3.40 percent from 3.39 percent, with points increasing to 0.36 from 0.35 (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 3.43 percent from 3.29 percent, with points decreasing to 0.23 from 0.35 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 5.2 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.