Mortgage Application Activity Down for Third Consecutive Week

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Mortgage Application Activity Hits Summer Doldrums


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Mortgage activity declined
again during the week ended July 27.  The
Mortgage Bankers Association’s (MBA’s) Market Composite Index, a measure of loan
application volume was down for the third consecutive week
, falling by 2.5
percent on a seasonally adjusted basis from the July 20 level.  On an unadjusted basis the index lost 3
percent.

Bost the seasonally
adjusted and the unadjusted Purchase Indicies were also down 3 percent.  The adjusted Purchase Index has declined an
aggregate of 9 percentage points over the last three weeks, reflecting the
recent softening of both new and existing home sales. The unadjusted Purchase
Index remains 1 percent higher than during the same week in 2017.

 

Refi Index vs 30yr Fixed

 

 

Purchase Index vs 30yr Fixed

 

 

The
Refinance Index
decreased 2 percent from the previous week.  The share of applications intended for
refinancing increased from 36.8 percent of the total the previous week to 37.1
percent.

Applications
for FHA-backed mortgages rose to 10.4 percent of the total submitted from 9.9
percent the previous week and the VA share tick up to 10.5 percent from 10.2
percent. The USDA share was unchanged at 0.8 percent.

With
the exception of fixed rate mortgages (FRM) backed by the FHA, interest rates
increased last week on both a contract and an effective basis.  The FHA rate was unchanged at 4.78 percent
and points ticked up to 0.74 from 0.73.  The
effective rate was also unchanged.

The average rate
for 30-year FRM with loan balances at or below the conforming limit of $453,100
jumped to 4.84 percent from 4.77 percent.  Points were unchanged at 0.45.   

The rate for jumbo
30-year FRM
, loans that exceed the conforming loan limit, increased by an
average of 4 basis points to 4.76 percent. 
Points rose to 0.37 from 0.31.    

The average
contract interest rate for 15-year FRM increased to 4.29 percent from 4.23 percent,
with points increasing to 0.53 from 0.44.

The average
contract interest rate for 5/1 adjustable rate mortgages (ARMs) increased to
its highest level in the history of the MBA survey, 4.17 percent from 4.09
percent, with points increasing to
0.32 from 0.29.  The ARM share of applications
was up slightly from 6.3 to 6.4 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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