MBA: Mortgage Applications Up 3rd Straight Week

Mortgage applications rose for the third consecutive week as interest rates hovered at record levels, the Mortgage Bankers Association reported in its Weekly Mortgage Applications Survey for the week ending July 17. 

The Market Composite Index increased by 4.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 4 percent compared to the previous week. 

The unadjusted Refinance Index increased by 5 percent from the previous week and was 122 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 64.8 percent of total applications from 64.2 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 19 percent higher than the same week one year ago.

The FHA share of total applications decreased to 10.8 percent from 11.1 percent the week prior. The VA share of total applications decreased to 10.8 percent from 11.0 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

“Mortgage applications increased last week despite mixed results from the various rates tracked in MBA’s survey,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The average 30-year fixed rate mortgage rose slightly to 3.20 percent, but some creditworthy borrowers are being offered rates even below 3 percent. As a result, these low rates drove a 5 percent weekly gain in refinances and a robust 122 percent increase from a year ago. There continues to be strong homebuyer demand this summer, as home shoppers have returned to the market in many states. Purchase activity increased again last week and was up 19 percent compared to last year – the ninth straight week of year-over-year increases.”  

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.20 percent from 3.19 percent, with points increasing to 0.35 from 0.33 (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 $510,400) decreased to 3.51 percent from 3.53 percent, with points remaining unchanged at 0.29 (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 3.13 percent from 3.24 percent, with points unchanged at 0.29 (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 2.71 percent from 2.70 percent, with points increasing to 0.35 from 0.32 (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 decreased to 2.89 percent from 3.00 percent, with points increasing to 0.12 from 0.02 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity remained unchanged at 3.0 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.