Mortgage Applications Face a Slight Decline

September 21, 2018

One of the measures of mortgage loan application volume, the market Composite Index, fell 0.1 percent on a seasonally adjusted basis from the previous week. The index fell 2 percent on an unadjusted basis from the previous week. The Refinance Index fell 1 percent from the week prior as well. The seasonally adjusted Purchase Index rose 1 percent from the previous week. The unadjusted Purchase Index fell 2 percent from the week before and was 2 percent higher than the same week a year ago.

The market experienced an increase in the Refinance share of mortgage activity from 38.7 percent of total applications during the previous week to 38.9 percent. There was a decrease to 6.1 percent of total applications in the adjustable rate mortgage (ARM) share of activity.

At 10.2 percent, the FHA share of total applications remained the same as the previous week. There was a decrease in the VA share of total applications from 10.5 percent the previous week to 10.0 percent this last week. The USDA share of total applications show an increase to 0.8 percent from 0.7 percent the previous week.

The market also experienced an increase to 4.80 percent from 4.78 percent in the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453, 100 or less), with loan points falling to 0.43 from 0.46 (inclusive of the origination fee) for the 80 percent loan-to-Value ratio (LTV) loans. The effective rate was stable from the week prior.

There was a decrease from 4.68 percent to 4.67 percent in the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453, 100), with unchanged points at 0.30 (inclusive of the origination fee) for 80 percent LTV loans. There was a decrease in the effective rate from the previous week.

The average contract interest rate for 15-year fixed-rate mortgages fell to 4.23 percent from 4.24 percent, with points reducing from 0.48 to 0.45 (inclusive of the origination fee) for 80 percent LTV loans. It also experienced a fall in the effective rate from the week prior.

There was an increase in the average contract interest rate for 5/1 ARMs to 4.09 percent from 3.95 percent, with points falling to 0.31 from 0.34 (inclusive of the origination fee) for 80 percent LTV loans. The effective rate went up from the previous week as well.

Source: Mortgage Bankers Association