Mortgage Applications Decrease in August 23rd MBA Weekly Survey

Mortgage applications decreased 6.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (“MBA”) Weekly Mortgage Applications Survey for the week ending August 23, 2019.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 167 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 2 percent higher than the same week one year ago.

“U.S. Treasury yields were volatile over the course of the week, as the ongoing trade dispute between the U.S. and China continued to generate uncertainty among investors. Rates increased for the first time since the week of July 12, but were still 80 basis points lower than the beginning of the year,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “With rates edging higher, refinances and purchase applications fell, at 8 percent and 6 percent, respectively.”

Added Kan, “Purchase applications were still up around 2 percent year-over-year, but the drop in rates this summer have not yet led to a significant boost in activity. Uncertainty over the near-term economic outlook and low supply continue to be the predominant headwinds for prospective homebuyers.”

The refinance share of mortgage activity decreased to 62.4 percent of total applications from 62.7 percent the previous week. The adjustable-rate mortgage (“ARM”) share of activity decreased to 6.1 percent of total applications.

The FHA share of total applications increased to 10.5 percent from 9.7 percent the week prior. The VA share of total applications decreased to 9.9 percent from 11.6 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 3.94 percent from 3.90 percent, with points increasing to 0.38 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (“LTV”) 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 $484,350) increased to 3.89 percent from 3.88 percent, with points increasing to 0.26 from 0.24 (including the 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 the FHA decreased to 3.80 percent from 3.87 percent, with points increasing to 0.33 from 0.32 (including the 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 increased to 3.31 percent from 3.30 percent, with points remaining unchanged at 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.42 percent from 3.35 percent, with points decreasing to 0.39 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

Contact:

Adam DeSanctis – adesanctis@mba.org – (202) 557-2727

Source: Mortgage Bankers Association