Mortgage Apps Declined Last Week, Despite Lower Rates

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Mortgage
applications, both for home purchases and refinancing, declined for the second
consecutive week during the period ending April 6. The Mortgage Bankers
Association (MBA) reports that its Market Composite Index, a measure of application
volume, was down 1.9 percent on a seasonally adjusted basis compared to the
week ended March 30.  The unadjusted index
lost 1 percent.

Purchase
applications were down 2 percent from the previous week on a seasonally
adjusted basis.  The non-seasonally
adjusted index was off by 1 percent week-over-week and was 0.5 percent lower
than during the same week in 2017.

Refinancing continued to lose ground, getting only a 38.4 percent share of applications, down from 38.5 percent the previous week.  It was the lowest market share for refinancing since September 2008. The Refinancing Index decreased 2 percent when compared to a week earlier.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

The FHA share of total applications rose to 11.0
percent from 10.1 percent and the VA share was up to 10.9 percent from 10.3
percent. Applications for USDA loans remained at 0.8 percent of the total received.

The downturn in
applications occurred despite a general decline in interest rates. The average
contract rate for 30-year fixed-rate mortgages (FRM) with balances at or below the
conforming limit of $453,100 was 4.66 percent compared to 4.69 percent a week
earlier.  Points ticked up to 0.46 from
0.43, but the effective rate moved lower.   

The rate for jumbo
30-year FRM, loans with balances higher than the conforming limit, was down 3
basis points to 4.53 percent.  Points
rose to 0.31 from 0.27, but the effective rate still moved lower.   

FHA-backed 30-year
FRM had an average contract rate of 4.66 with 0.76 point.  The previous week the prevailing rate was
4.74 percent with 0.54 point. The effective rate also declined.

The contract rate
for 15-year FRM averaged 4.08 percent, 1 basis point lower than the prior week,
but points jumped to 0.50 from 0.42.  The
result was a higher effective rate.

Both contract and
effective rates rose for 5/1 adjustable rate mortgages (ARMs.)  The contract rate was the highest since
February 2011, 3.93 percent with 0.60 point, up from 3.87 percent with 0.28
point. The ARM share of activity decreased to 6.3 percent of total applications
from 6.5 percent.

MBA’s Weekly
Mortgage Applications Survey has been conducted since 1990 and covers over 75
percent of all U.S. retail residential mortgage applications.  Respondents include mortgage bankers,
commercial banks and thrifts.  Base
period and value for all indexes is March 16, 1990=100 and interest rate
information is based on loans with an 80 percent loan-to-value ratio and points
that include the origination fee.



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