Mortgage
applications have now fallen in six of the last eight weeks. The Mortgage
Bankers Association (MBA) said its seasonally adjusted Market Composite Index,
a measure of application volume, fell lost another 3.7 percent on a seasonally
adjusted basis during the week ended February 8. On an unadjusted basis the composite was down
4.0 percent.
The
Refinance Index decreased 0.1 percent from the previous week although the
refinancing share of applications submitted rose to 43.2 percent. During the
week ended February 1 refinancing had a 41.6 percent share.
Both
the seasonally adjusted and the unadjusted Purchase Indices were down 6.0
percent from the prior week and the unadjusted version came in 5.0 percent
below its level during the same week in 2018.
Applications for both FHA and VA loans
constituted 11 percent of the total volume, up from 10.5 and 10.0 percent
respectively the previous week. The USDA share increased to 0.6 percent from
0.5 percent the week prior.
The average dollar amount of loans was
down compared to the previous week. Purchase loan balances dipped from $314.500
to $312,300 and the average for all loans was $313,400 compared to $320,500.
"Application
activity fell last week - even with rates decreasing - as renewed uncertainty
about the domestic and global economy likely held potential homebuyers off the
market," said Joel Kan, MBA's Associate Vice President of Industry Surveys and
Forecasts. "Despite the recent decline in applications, we still expect that
the continued strength of the job market and lower rates will support more
purchase activity in the coming months."
Added
Kan, "The 30-year fixed-rate mortgage dropped to its lowest level since last
March, and was 52 basis points lower than its recent high last November.
Government refinances provided a bright spark, picking up over 10 percent, as
both FHA and VA refinancing activity saw increases over the week."
Average
interest rates declined for all loan types on both a contract and an effective
basis. The average contract interest rate for 30-year fixed-rate mortgages
(FRM) with origination balances at or below the conforming loan limit of $484,350
decreased to 4.65 percent from 4.69 percent, with points dipping to 0.43 from
0.45.
Jumbo
30-year FRM, loans with balances greater than the conforming limit, had an
average rate of 4.48 percent with 0.27 point.
The previous week the rate was 4.50 percent with 0.28 point.
The
rate for 30-year FRM backed by the FHA decreased to 4.61 percent from 4.70
percent. Points decreased to 0.53 from
0.57.
The
average rate for 15-year FRM dropped 7 basis points to 4.04 percent. Points increased to 0.48 from 0.47
The
average rate for 5/1 adjustable rate mortgages (ARMs) fell to 3.97 percent from
4.04 percent while points rose to 0.42 from 0.37. The ARM share of activity decreased to 7.5
percent of total applications from 7.8 percent.
MBA's
Weekly Mortgage Applications Survey has been conducted since 1990 and covers
over 75 percent of all U.S. retail residential applications Respondents include
mortgage bankers, commercial banks and thrifts. Base period and value for
all indexes is March 16, 1990=100 and interest rate information is based on
loans with an 80 percent loan-to-value ratio and points that include the
origination fee.