Mortgage Applications Decrease in February 14th MBA Weekly Survey

Mortgage applications decreased 6.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (“MBA”) Weekly Mortgage Applications Survey for the week ending February 14, 2020.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 165 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 10 percent higher than the same week one year ago.

“Treasury yields moved slightly higher last week, despite uncertainty surrounding the economic impact from the spread of the coronavirus. The 30-year fixed mortgage increased five basis points to 3.77 percent as a result, causing refinance applications – driven by a 11 percent drop in applications for conventional refinances – to fall,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Even with an 8 percent decline, the refinance index was still at its third highest reading so far this year. Government refinance activity, which tends to lag movements in the conventional market, bucked the overall trend, as VA loan refinances jumped 23 percent.”

Added Kan, “Purchase applications fell 3 percent last week, as there continues to be some pullback after a strong January. Activity was still 10 percent higher than a year ago, but too few options – especially at the lower portion of the market – are slowing some would-be buyers.”

The refinance share of mortgage activity decreased to 63.2 percent of total applications from 65.5 percent the previous week. The adjustable-rate mortgage (“ARM”) share of activity decreased to 5.4 percent of total applications.

The FHA share of total applications decreased to 9.5 percent from 9.7 percent the week prior. The VA share of total applications increased to 12.1 percent from 10.1 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.77 percent from 3.72 percent, with points remaining unchanged at 0.28 (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 $510,400) increased to 3.79 percent from 3.75 percent, with points increasing to 0.19 from 0.17 (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 3.86 percent from 3.84 percent, with points decreasing to 0.24 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.22 percent from 3.20 percent, with points decreasing to 0.26 from 0.27 (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 increased to 3.23 percent from 3.21 percent, with points increasing to 0.21 from 0.13 (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.

Contact:

Adam DeSanctis – adesanctis@mba.org – (202) 557-2727

Source: Mortgage Bankers Association