Mortgage
application activity declined during the week as the 30-year mortgage rate
crossed the 5.0 percent line for the first time in seven years and other
products moved to new seven or eight year highs. The Mortgage Bankers Association (MBA) said
its Market Composite Index, a measures of application volume, declined by 1.7
percent on a seasonally adjusted basis during the week ended October 5. On an unadjusted basis the index was down by
2.0 percent.
The
seasonally adjusted Purchase Index lost ground for the first time in six weeks,
decreasing by 1 percent compared to the previous week, and was down by 1.0
percent on an unadjusted basis as well.
The unadjusted version remained 2.0 percent higher than during the same
week in 2017. The Refinance Index fell
by 3.0 percent and the share of total applications that were for refinancing
dipped to 39.0 percent from 39.4 percent during the week ended September 28.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
The distribution
of loan applications among product types shifted only slightly. The FHA share rose to 10.5 percent from 10.2
percent, the VA share was unchanged at 10.0 percent and USDA applications
accounted for 0.8 percent, up from 0.7 percent the prior week.
Contract
interest rates moved higher for all loan products and for all but the FHA-backed
loans on an effective basis. The 30-year
fixed-rate mortgage (FRM) with origination balances at or below the conforming
limit of $453,100 had an average rate of 5.05 percent, up from 4.96 percent the
previous week and the highest level since February 2011. Points increased from 0.49
to 0.51.
Jumbo FRM,
loans with balances exceeding the conforming limit, moved to the highest level
since July 2011, 4.99 percent with 0.35 point.
The previous week the rate was 4.93 percent with 0.31 point.
The average
contract interest rate for 30-year fixed-rate mortgages backed by the FHA
increased to its highest level since April 2011, 4.98 percent, from 4.95
percent. Points dropped to 0.63 from 0.80, pulling the effective rate lower.
The average
contract interest rate for 15-year fixed-rate mortgages increased 5 basis
points to 4.44 percent, the highest rate since April 2010. Points increased to 0.58 from 0.50.
The average
contract interest rate for 5/1 adjustable rate mortgages (ARMs) increased to
its highest level since the series began in 2011, 4.29 percent with 0.52 points.
The prior week the rate was 4.24
percent, with 0.48 point. The ARM share
of activity increased from 7.1 to 7.3 percent of total applications, the
highest since early March.
MBA's Weekly
Mortgage Applications Survey has been conducted since 1990 and covers over 75
percent of all U.S. retail residential mortgage 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.