Mortgage application activity was generally muted last week accoording to the Mortgage Bankers Association (MBA).  Where there were changes in the MBA's Market Composite Index, they were small and without much direction.

The Index, a measure of mortgage loan application volume, was unchanged on a seasonally adjusted basis from one week earlier, the first time since at least mid-2013 that the index has failed to make even a fractional move. On an unadjusted basis the index was down 1 percent.

The Refinance Index declined by 1 percent compared to the week ended October 27 and the refinance share of mortgage activity inched up to 49.0 percent from 48.7 percent. The seasonally adjusted Purchase Index rose 1 percent and fell 2 percent on an unadjusted basis. Purchase mortgage volume was 9 percent higher compared to the same week in 2016.  

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

There was a tiny pick-up in the share of government backed mortgages. The FHA share increased to 10.6 percent from 10.4 percent and the VA share was 10.0 percent compared to 9.9 percent the previous week. The share of USDA loan applications bucked the trend, decreasing to 0.7 percent from 0.8 percent.

Mortgage rates reversed or at least paused in what has been a slow upward trend over the last few weeks. Contract rates fell across the board and were lower on an effective basis for all fixed-rate products. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $424,100 or less decreased to 4.18 percent from 4.22 percent. Points declined to 0.38 from 0.43  

The jumbo version of the 30-year FRM, loans with balances above the $424,100 conforming rate, dropped 4 basis points to 4.16 percent. Points decreased to 0.24 from 0.27.

The rate for FHA 30-year FRM was 4.05 percent with 0.43 point.  The prior week the rate was 4.07 percent with 0.46 point.

There was an average 1 basis point decline in the rates for 15-year FRM, to 3.51 percent. Points were unchanged at 0.44. 

The share of applications that were for adjustable rate mortgages (ARMs) ticked down to 6.6 percent from 6.8 percent. The average contract interest rate for 5/1 ARMs was unchanged at 3.33 percent but points rose to 0.59 from 0.50, pushing the effective rate higher.

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.