Mortgage Applications Increase in Latest MBA Weekly Survey

Company Press Release

Mortgage applications rose 4.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (“MBA”) Weekly Mortgage Applications Survey for the week ending October 19, 2018. The previous week’s results did not include an adjustment for the Columbus Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5 percent compared with the previous week. The Refinance Index increased 10 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 0.2 percent higher than the same week one year ago.

“Mortgage application activity rebounded the week following the Columbus Day holiday, but both purchase and refinance levels remained lower than where they were two weeks ago,” said Joel Kan, MBA AVP of economic and industry forecasting. “The holiday impacted refinance applications more than purchases, as refinances rebounded almost 10 percent. Meanwhile, purchase applications increased two percent over the prior week but were still four percent lower than two weeks ago – a sign that both the jump in mortgage rates and tight inventory continue to hold back application activity. Mortgage rates increased over the week for most loan types, with most rates remaining at seven-year highs.”

The refinance share of mortgage activity increased to 39.8 percent of total applications from 38.1 percent the previous week. The adjustable-rate mortgage (“ARM”) share of activity decreased to 7.0 percent of total applications.

The FHA share of total applications decreased to 10.1 percent from 10.4 percent the week prior. The VA share of total applications decreased to 10.1 percent from 10.4 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since February 2011, 5.11 percent from 5.10 percent, with points decreasing to 0.52 from 0.55 (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 $453,100) increased to 5.01 percent from 4.98 percent, with points decreasing to 0.28 from 0.34 (including the origination fee) for 80 percent 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 5.07 percent from 4.99 percent, with points decreasing to 0.61 from 0.69 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 4.50 percent, with points increasing to 0.55 from 0.54 (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 its highest level since the series began in 2011, 4.47 percent from 4.34 percent, with points increasing to 0.37 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

Source: Mortgage Bankers Association