Mortgage Applications Increase in MBA Weekly Survey

Mortgage applications increased 2.9 percent from one week earlier, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending Sept. 4.

This week’s results are being compared to the week of Labor Day 2019. 

The Market Composite Index increased by 2.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 2 percent compared to the previous week.

The unadjusted Refinance Index increased by 3 percent from the previous week and was 60 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 63.1 percent of total applications from 62.5 percent the previous week.

The seasonally adjusted Purchase Index increased by 3 percent from one week earlier. The unadjusted Purchase Index increased by 0.2 percent compared to the previous week and was 40 percent higher than the same week one year ago.

“Mortgage rates declined last week, with a noteworthy 5-basis-point decrease in the 15-year fixed rate to a new record low of 2.62 percent,” said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. “The drop in rates led to a rebound in refinancing activity, driven mainly by borrowers applying for conventional loans.”

Kan noted purchase applications were 40 percent higher than the same week last year, “but the increase is skewed higher by being compared to Labor Day 2019,” he said. “Nevertheless, there continues to be resiliency in the purchase market. Applications were up almost 3 percent on a weekly basis and the average loan size continued to increase, hitting a survey high at $368,600.”

Kan said conventional, VA and FHA purchase applications all increased last week, “highlighting the strong overall demand for buying a home.”

The refinance share of mortgage activity increased to 63.1 percent of total applications from 62.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 2.2 percent of total applications.

The FHA share of total applications remained unchanged remained unchanged from 10.2 percent the week prior. The VA share of total applications decreased to 11.2 percent from 11.4 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.07 percent from 3.08 percent, with points remaining unchanged at 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) decreased to 3.40 percent from 3.41 percent, with points decreasing to 0.31 from 0.38 (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 the FHA decreased to 3.16 percent from 3.19 percent, with points increasing to 0.42 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

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.