Mortgage Applications Decrease in MBA Weekly Survey

Mortgage applications fell for the first time in four weeks, albeit slightly, as the 30-year fixed rate held at a record low, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending July 24. 

The Market Composite Index decreased by 0.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 1 percent compared to the previous week. 

The unadjusted Refinance Index decreased by 0.4 percent from the previous week and was 121 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 65.1 percent of total applications from 64.8 percent the previous week.

The seasonally adjusted Purchase Index decreased by 2 percent from one week earlier. The unadjusted Purchase Index decreased by 1 percent compared to the previous week and was 21 percent higher than the same week one year ago.

The FHA share of total applications decreased to 9.6 percent from 10.8 percent the week prior. The VA share of total applications increased to 11.2 percent from 10.8 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

“Mortgage rates remained near record lows for conventional loans last week, and refinances in the conventional sector continued to slightly increase. However, rates on FHA loans rose, leading to an almost 18 percent drop in FHA refinances,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Homebuyers stepped back slightly, and there was a larger drop in purchase application volume for FHA, VA, and USDA loans. This trend, along with the fact that average loan sizes are increasing, indicate that prospective first-time buyers are being impacted more by the rising economic stress caused by the resurgence in COVID-19 cases, as well as the uncertainty on how the next round of government support will take shape.” 

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) remained unchanged at 3.20 percent, with points increasing to 0.37 from  0.35 (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) increased to 3.52 percent from 3.51 percent, with points increasing to 0.30 from 0.29 (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 3.27 percent from 3.13 percent, with points increasing to 0.35 from 0.29 (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 2.76 percent from 2.71 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 3.08 percent from 2.89 percent, with points decreasing to 0.11 from 0.12 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 3.2 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.