Mortgage Applications Dip in MBA Weekly Survey

Mortgage applications fell slightly even as key interest rates remained below 3 percent, the Mortgage Bankers Association reported in its Weekly Mortgage Applications Survey for the week ending November 13.

The week’s results do not include an adjustment for the Veterans’ Day holiday.

The Market Composite Index decreased by 0.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 2 percent compared to the previous week. 

The unadjusted refinance Index decreased by 2 percent from the previous week but was 98 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 69.8 percent of total applications from 70.0 percent the previous week.

The seasonally adjusted Purchase Index increased by 4 percent from one week earlier. The unadjusted Purchase Index decreased by 1 percent compared with the previous week and was 26 percent higher than the same week one year ago.

“Mortgage market activity was mixed last week, despite the 30-year fixed rate mortgage staying below 3 percent,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The purchase market recovered from its recent weekly slump, with activity increasing 3 percent and climbing above year-ago levels for the 26th straight week. Housing demand remains supported by the ongoing recovery in the job market, and an increased appetite from households seeking more space because of the pandemic.”

Kan noted despite the decrease in the refinance index last week but remained a robust 98 percent above a year ago. “The average refinance loan balance of $291,000 last week was the lowest since January,” he said. “Many borrowers with higher loan balances may have acted earlier on in the current refinance wave.” 

MBA reported the FHA share of total applications decreased to 10.5 percent from 10.6 percent the week prior. The VA share of total applications decreased to 12.1 percent from 12.6 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 2.99 percent from 2.98 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) decreased to 3.11 percent from 3.13 percent, with points decreasing to 0.28 from 0.31 (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 increased to 3.11 percent from 3.08 percent, with points unchanged at 0.37 (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 2.59 percent from 2.55 percent, with points decreasing to 0.35 from 0.37 (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 2.84 percent from 2.79 percent, with points increasing to 0.53 from 0.42 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 1.9 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.