Slight increase in mortgage applications but refis were lower

Mortgage rates increased last week to their highest point since the end of July, resulting in a decline in mortgage applications for refinances.

Data from the Mortgage Bankers Association shows that overall applications were up 0.6% (seasonally adjusted) week-over-week according to its Market Composite Index (up 0.3% unadjusted).

"The 10-year Treasury rate rose slightly last week, as markets expected more progress toward a trade deal between the U.S. and China. Mortgage rates increased for the second straight week as a result, with the 30-year fixed rate climbing to 4.05% - the highest level since the end of July," said Joel Kan, Associate Vice President of Economic and Industry Forecasting. "Mortgage applications were mostly unchanged, with purchase activity rising 2% and refinances decreasing less than 1%.”

The Purchase Index was up 2% both seasonally adjusted and unadjusted and was 10% higher than a year ago.

“Considering how much lower rates are compared to the end of 2018, purchase applications should continue showing solid year-over-year gains."

Share of applications

• The refinance share of mortgage activity decreased to 58.0% of total applications from 58.5% the previous week;
• The adjustable-rate mortgage (ARM) share of activity increased to 5.2% of total applications;
• The FHA share of total applications decreased to 12.0% from 12.1% the week prior;
• The VA share of total applications decreased to 11.8% from 13.5% the week prior;
• The USDA share of total applications increased to 0.6% from 0.5% the week prior.

Average contract rates

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.05% from 4.02%, with points decreasing to 0.37 from 0.38 (including the origination fee) for 80% 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) increased to 4.01% from 3.96%, with points remaining unchanged at 0.30 (including the origination fee) for 80% LTV loans. The effective rate increased from last week. 

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.83% from 3.79%, with points increasing to 0.28 from 0.26 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.40% from 3.39%, with points increasing to 0.36 from 0.35 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.43% from 3.29%, with points decreasing to 0.23 from 0.35 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.