Refinance applications rise amid continued rate volatility

by Steve Randall07 Nov 2019

Refinance and purchase mortgage applications diverged last week as volatility in mortgage rates continued but ultimately ended the week lower.

The Mortgage Bankers Association’s weekly survey of mortgage lenders shows that overall mortgage applications were down 0.1% (seasonally adjusted, down 1% unadjusted) for the week ending November 1, 2019.

The Refinance Index gained 2% week-over-week and 144% year-over-year; while the Purchase Index decreased 3% week-over-week seasonally adjusted and decreased 4% on an unadjusted basis - but was 7% higher than the same week one year ago.

"US Treasury yields once again exhibited some intraweek volatility before declining sharply toward the end of the week. As a result, mortgage rates decreased, with the 30-year fixed rate falling below 4% again," said Joel Kan, Associate Vice President of Economic and Industry Forecasting. "Amidst persistent supply constraints in the entry-level price range, there's evidence that high-end homebuyers are more active this fall. The average loan size for purchase applications increased to its highest level since May."

Share of activity
Compared with a week earlier:

  • the refinance share of mortgage activity increased to 59.5% of total applications from 58.0% the previous week;
  • the adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.2% of total applications;
  • the FHA share of total applications decreased to 11.8% from 12.0% the week prior;
  • the VA share of total applications increased to 12.0% from 11.8% the week prior;
  • the USDA share of total applications remained unchanged from 0.6% the week prior. 

Contract rates
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.98% from 4.05%, with points remaining unchanged at 0.37 (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 3.97% from 4.01%, with points decreasing to 0.24 from 0.30 (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 3.83%, with points decreasing to 0.21 from 0.28 (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 3.38% from 3.40%, with points decreasing to 0.31 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 remained unchanged at 3.43%, with points decreasing to 0.21 from 0.23 (including the origination fee) for 80% LTV loans.


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