Purchase Volume Continues to Improve

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The Mortgage
Bankers Association (MBA) says its Market Composite Index, a measure of mortgage
application volume, moved higher during the week ended September 21 as did all
of its seasonally adjusted and unadjusted components.  It was the second straight week that all of
the MBA indices gained ground
, the first such double play since early 2016.

The Component
index was up 2.9 percent
on a seasonally adjusted basis compared to the week ended
September 14 and 2.0 percent on an unadjusted basis.  The volume of applications for purchase
mortgages increased 3 percent on an adjusted basis, the fourth week in a row
that measure has gained ground.  It was
up 2 percent before adjustment.  The unadjusted
version was 4 percent higher than during the same week in 2017.

The Refinancing Index
rose 3 percent
from its prior level and the refinancing share of total applications
increased to 39.4 percent from 39.0 percent the previous week.

 

Refi Index vs 30yr Fixed

 

 

Purchase Index vs 30yr Fixed

 

 

The distribution
of applications across loan types
shifted slightly with the FHA share dipping to
10.4 percent from 10.6 percent.  The VA
loan share ticked up 0.1 point to 10.1 percent while the USDA portion was
unchanged at 0.7 percent.

Interest rates for
all types of loans moved higher on both a contract and an effective rate.  The average rate for 30-year fixed-rate
mortgages (FRM) with origination balances at or below the current conforming
limit of $453,100 reached its highest level since April 2011, 4.97 percent with
0.47 point.  The previous week the rate
was 4.88 percent with 0.44 point.

The 30-year jumbo
FRM
, loans with balances higher than the conforming limit, had an average rate
of 4.92 percent, up 15 basis points from the prior week.  Points increased to 0.30 from 0.28.

The rate for
30-year FRM backed by the FHA increased from 4.90 percent to 4.94 percent
during the week. Points averaged 0.83 compared to 0.73 the prior week.

Fifteen year FRM
had an average rate of 4.38 percent, up from 4.30 percent. Points increased
from 0.49 to 0.52.

The average rate
for 5/1 adjustable rate mortgages rose to the highest level since MBA began
tracking the product, 4.22 percent with 0.60 point. The previous week the rate
was 4.17 percent with 0.29 point. The share of applications for ARMs remained
at 6.5 percent of the total.

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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