Mortgage apps lower as conventional refinance activity slips

by Steve Randall05 Jul 2019

There was a decrease in mortgage applications for the week ended June 28 despite purchase activity strengthening.

Data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey shows that overall applications were down 0.3% week-over-week on an unadjusted basis and down 0.1% on an adjusted basis.

Purchase activity was up 1% on both an unadjusted and seasonally adjusted basis while refinance activity was down 1%.

“Purchase applications picked up slightly last week, as conventional and government activity were each up around 1%. Furthermore, in continuation of the gradual growth trend seen throughout the first half of 2019, purchase activity was almost 10% higher than a year ago," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "A still-strong job market, improving affordability and lower mortgage rates continue to support growth."

Conventional refinances were down slightly but government-backed refinance loans were up, with FHA activity rising 17%.

“Additionally, the average loan amount for government refinance applications reached another survey high at $282,500,” added Kan. “In a week of mixed mortgage rate movements across the various loan types, the 30-year fixed rate finished slightly higher than last week but was still close to lows last seen in 2016."

The refinance share of mortgage activity decreased to 51.0% of total applications from 51.5% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.2% of total applications.

Compared with the previous week, the FHA share of total applications increased to 10.1% from 9.6%; the VA share increased to 12.8% from 12.5%; the USDA share of total applications remained unchanged at 0.6%.

Average contract rates

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.07 percent from 4.06 percent, with points increasing to 0.36 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) remained unchanged at 4.00 percent, with points increasing to 0.25 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.97 percent from 4.01 percent, with points decreasing to 0.30 from 0.36 (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 3.42 percent from 3.40 percent, with points increasing to 0.32 from 0.31 (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 decreased to 3.46 percent from 3.50 percent, with points decreasing to 0.26 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


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