Mortgage applications jumped last week says MBA

by Steve Randall03 Oct 2019

There was a rise in mortgage applications last week as rates eased, bringing homeowners looking to refinance off the sidelines.

The Mortgage Bankers Association says that its Market Composite Index gained 8.1% week-over-week on a seasonally adjusted basis (8% unadjusted) for the week ending September 2019, driven by a 14% jump for the Refinance Index, which was up 133% from a year earlier.

The Purchase Index was up just 1% week-over-week on an adjusted basis; unadjusted it was up 1% week-over-week and 10% year-over-year.

"Mortgage rates mostly decreased last week, with the 30-year fixed rate dropping below 4% for the sixth time in the past nine weeks. Borrowers responded to these lower rates, leading to a 14% increase in refinance applications," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Although refinance activity slowed in September compared to August, the months together were the strongest since October 2016. The slight changes in rates are still causing large swings in refinance volume, and we expect this sensitivity to persist."

Share of activity
Of all mortgage application activity last week:

  • the refinance share increased to 58.0% from 54.9%;
  • the adjustable-rate mortgage (ARM) share increased to 5.5%;
  • the FHA share decreased to 10.4% from 11.4% the week prior;
  • the VA share of total applications decreased to 12.4% from 13.1% the week prior;
  • the USDA share of total applications decreased to 0.5% from 0.6% the week prior

Contract mortgage rates
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.99% from 4.02%, with points remaining unchanged at 0.38 (including the origination fee) for 80% 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 $484,350) decreased to 3.98% from 4.00%, with points increasing to 0.28 from 0.26 (including the origination fee) for 80% 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 3.79% from 3.90%, with points remaining unchanged at 0.23 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.43% from 3.46%, with points increasing to 0.37 from 0.36 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.42% from 3.39%, with points increasing to 0.37 from 0.29 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.


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