Mortgage Applications Rise 7% in MBA Weekly Survey

Despite a jump in key mortgage interest rates, mortgage applications increased from one week earlier, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending September 18.

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

The Market Composite Index increased by 6.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 18 percent compared to the previous week. 

The unadjusted Refinance Index increased 9 percent from the previous week and was 86 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 64.3 percent of total applications from 62.8 percent the previous week.

The seasonally adjusted Purchase Index increased by 3 percent from one week earlier. The unadjusted Purchase Index increased by 13 percent compared to the previous week and was 25 percent higher than the same week one year ago.

“Mortgage applications activity remained strong last week, even as the 30-year fixed-rate mortgage and 15-year fixed-rate mortgage increased to their highest levels since late August,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Purchase applications were up over 25 percent from a year ago, and the demand for higher-balance loans pushed the average purchase loan size to another record high.

Kan said the strong interest in homebuying observed this summer has carried over to the fall. “Despite the uptick in rates, refinance applications increased around 9 percent and were almost 86 percent higher than last year,” he said. “Both conventional and government refinance activity, and in particular FHA refinances, picked up last week.”

MBA said the FHA share of total applications increased to 10.1 percent from 9.7 percent the week prior. The VA share of total applications decreased to 12.0 percent from 12.3 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.10 percent from 3.07 percent, with points increasing to 0.46 from 0.32 (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 3.35 percent from 3.41 percent, with points increasing to 0.42 from 0.27 (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 3.23 percent from 3.16 percent, with points increasing to 0.37 from 0.35 (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 2.64 percent from 2.61 percent, with points increasing to 0.47 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 decreased to 3.19 percent from 3.20 percent, with points increasing to 0.64 from 0.58 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 2.2 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.