Mortgage Applications Increase in Latest MBA Weekly Survey
Mortgage applications increased 3.8 percent for the week ending October 30, 2020 compared to one week earlier, the Mortgage Bankers Association reported this morning.
The MBA Weekly Mortgage Applications Survey reported a 3.8 percent increase in the overall Market Composite Index, seasonally adjusted, from one week earlier. On an unadjusted basis, the Index increased by 3 percent compared to the previous week.
The unadjusted Refinance Index increased by 6 percent from the previous week and was 88 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 68.7 percent of total applications from 66.7 percent the previous week.
The seasonally adjusted Purchase Index decreased by 1 percent from one week earlier. The unadjusted Purchase Index decreased by 3 percent compared to the previous week and was 25 percent higher than the same week one year ago.
The FHA share of total applications decreased to 11.1 percent from 11.7 percent the week prior. The VA share of total applications increased to 12.2 percent from 11.4 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.
“Mortgage rates continue to hover at record lows this fall,” said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. He noted the 30-year fixed mortgage rate remained essentially unchanged at 3.01 percent last week but rates for 15-year fixed-rate loans, FHA loans and jumbo loans all fell to new MBA survey lows.
“The drop in rates spurred an uptick in demand for refinances,” said Kan. “Activity increased over 6 percent, with borrowers notably seeking conventional and government loans. After a solid stretch of purchase applications growth, activity decreased for the fifth time in six weeks, but was still over 25 percent higher than a year ago, and has increased year-over-year for six straight months. 2020 continues to overall be a strong year for the housing market.”
MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.01 percent from 3.00 percent, with points decreasing to 0.38 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 3.18 percent from 3.28 percent, with points decreasing to 0.30 from 0.31 (including the 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 3.08 percent from 3.14 percent, with points decreasing to 0.26 from 0.35 (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 decreased to 2.55 percent from 2.60 percent, with points decreasing to 0.35 from 0.37 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 adjustable-rate mortgages decreased to 2.67 percent from 3.05 percent, with points decreasing to 0.52 from 0.64 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The ARM share of activity remained unchanged at 2.1 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.
