Applications for mortgages dipped week over week as refinances plummeted this week, according to the Mortgage Bankers Association.
MBA’s Market Composite Index fell 9.2% on a seasonally adjusted basis from a week ago, including the Thanksgiving holiday. On an unadjusted basis, mortgage applications plunged 38% from last week.
"US Treasury rates stayed flat last week, as uncertainty surrounding the UK elections offset positive domestic news on consumer spending," said Joel Kan, associate vice president of economic and industry forecasting at MBA. "Despite the 30-year fixed rate remaining unchanged at 3.97%, mortgage applications fell last week, driven down by a 16% drop in refinances.”
The refinance index went down 16% week over week but was 61% higher than the same week a year ago. The seasonally adjusted purchase index inched up 1% but dropped 33% on an unadjusted basis.
“Purchase applications were up slightly but declined 24% from a year ago. This week's year-over-year comparisons were distorted by Thanksgiving being a week later this year,” Kan said. “The purchase market overall looks healthy as we enter the home stretch of 2019. The seasonally adjusted purchase index was at its highest level since July, as a combination of wage gains, slower home-price appreciation, and slightly easing inventory conditions continue to support increased activity."
Share of mortgage application activity
- The refinance share of mortgage activity went down to 59% of total applications from 62% week over week
- The adjustable-rate mortgage (ARM) share of activity held steady at 4.8% of total applications
- The FHA share of total applications climbed to 12% from 11.7% the week before
- The VA share of total applications slipped to 12.7% from 14.1% the week before
- The USDA share of total applications stayed unchanged from 0.5% the week before