Mortgage Applications Flat in MBA Weekly Survey

Mortgage applications barely moved from one week earlier as interest rates jumped back above 4 percent, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending September 13.

Last week’s results included an adjustment for the Labor Day holiday.

The Market Composite Index decreased by just 0.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 10 percent compared to the previous week.

The unadjusted Refinance Index decreased by 4 percent from the previous week and was 148 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 57.9 percent of total applications from 60.0 percent the previous week.

The seasonally adjusted Purchase Index increased by 6 percent from one week earlier to the highest reading since July. The unadjusted Purchase Index increased by 16 percent compared to the previous week and was 15 percent higher than the same week one year ago.

The FHA share of total applications increased to 10.9 percent from 9.3 percent the week prior. The VA share of total applications increased to 12.7 percent from 11.9 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.

“The jump in U.S. Treasury rates at the end of last week caused mortgage rates to increase across the board,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Refinancing activity dropped as a result, driven solely by conventional refinances.”

Kan noted the average loan amount on purchase applications increased to its highest level since June. “This is a likely a sign that the underlying demand for buying a home remains strong, despite some of the recent volatility we have seen,” he said.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.01 percent from 3.82 percent, with points decreasing to 0.37 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 4.01 percent from 3.84 percent, its highest rate in seven weeks, with points decreasing to 0.29 from 0.34 (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 3.89 percent from 3.76 percent, with points decreasing to 0.30 from 0.31 (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 3.42 percent from 3.28 percent, with points decreasing to 0.36 from 0.47 (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 3.54 percent from 3.42 percent, with points decreasing to 0.29 from 0.48 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 5.0 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.