Mortgage
applications increased for the second week as interest rates again ticked lower
at well under 5 percent. The Mortgage Bankers Association said its Market
Composite Index, a measure of mortgage application volume, increased 5.3
percent on a seasonally adjusted basis during the week ended February 22. As that week began with the President's Day
holiday, data was adjusted to account for the shortened week. On an unadjusted basis, the Index was down 3
percent compared with the week ended February 15.
The seasonally
adjusted Purchase Index increased 6 percent from one week earlier while the
unadjusted version ticked down 1 percent week-over-week and was 3 percent
higher than the same week one year ago. The
Refinance Index increased 5 percent and the refinance share of mortgage
activity fell to 40.4 percent of total applications from 41.7 percent the
previous week.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
"Mortgage rates
were little changed last week, but as we anticipated, homebuyers are responding
favorably to this more stable rate environment," said Mike Fratantoni, MBA
Senior Vice President and Chief Economist. "Purchase applications for both
conventional and government loans rose last week, with the government gain led
by a 14 percent increase in applications for VA purchase loans."
Fratantoni added,
"Refinance application volume increased as well, with the index reaching its
highest level in a month. Borrowers with
larger loans tend to be more responsive for a given drop in rates, and
competition for these loans is fierce.
Therefore, it was not surprising to see the average rate for a 30-year
fixed jumbo loan drop to its lowest level since January 2018."
The
FHA share of total applications was unchanged from 10.2 percent the previous
week while the VA share rose to 10.7 percent from 10.1 percent. The USDA share dipped to 0.6 percent from 0.7
percent. The average origination balance
of a loan was $319,000. The average for
home purchase was $321,500.
The
average contract interest rate for 30-year fixed-rate mortgages (FRM) with origination
balances at or below the conforming limit of $484,350 decreased to 4.65 percent
from 4.66 percent. Points were unchanged
at 0.42 and the effective rate decreased.
The
rate for jumbo 30-year FRM, loans with balances higher than the conforming
limit, decreased to 4.40 percent from 4.56 percent. Points moved higher, to
0.29 from 0.23, but the effective rate declined.
The 30-year FRM
backed by the FHA had an average rate of 4.64 percent with 0.48 point. The prior week the rate was 4.68 percent with
0.58 point. The effective rate decreased.
The rate for 15-year
FRM was 4.00 percent, down 4 basis point from a week earlier. Points decreased to 0.38 from 0.44 and the effective
rate moved lower.
The
average contract interest rate for 5/1 adjustable rate mortgages (ARMs)
decreased to 3.95 percent from 4.00 percent, with points increasing to 0.4 from 0.24. The effective rate increased from last
week. The ARM share of activity declined
from 7.7 percent the previous week to 7.3 percent of total applications last
week.
MBA's
Weekly Mortgage Applications Survey 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.