After its 5.8 percent jump the previous week, the Mortgage Bankers Association's (MBA's) Market Composite Index, a measure of mortgage application volume, fell back during the week ended November 12 as rates ticked higher. The index fell 2.9 percent on a seasonally adjusted basis and was down 4 percent before adjustment.

As was the surge the prior week, the decline was driven by the Refinance Index which decreased 5 percent from the previous week and was 31 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 62.9 percent from 63.5 percent the previous week.  

The Purchase Index increased 2 percent from one week earlier on both an adjusted and an unadjusted basis. It was 6 percent lower than the same week one year ago.

 

Refi Index vs 30yr Fixed

 

Purchase Index vs 30yr Fixed

 

"Refinance applications decreased for the seventh time in eight weeks, as mortgage rates moved higher after two weeks of declines. Activity has been particularly sensitive to rate movements, and last week's decline was driven by a drop in conventional and FHA refinance applications, which offset an increase in VA refinance applications. All mortgage rates in MBA's survey increased, with the 30-year fixed rate climbing to 3.2 percent." said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Purchase applications increased for both conventional and government loan segments, as housing demand continues to show resiliency at a time - late fall - when home buying activity typically slows. The second straight increase in purchase applications suggests that stronger sales activity may continue in the weeks to come. Despite elevated demand, purchase applications were 5.7 percent lower than a year ago."

The FHA share of total applications increased to 8.9 percent from 8.8 percent and the VA share increased to 10.8 percent from 10.2 percent. The USDA share of total applications was unchanged from 0.5 percent. The average balance of a mortgage was $322,100 compared to $339,900 the prior week, but the average purchase mortgaged fell to $406,500 from $409,400.

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances

Of $548,250 or less increased to 3.20 percent from 3.16 percent, with points increasing to 0.43 from 0.34. The effective rate increased to 3.33 percent.

The rate for jumbo 30-year FRM, loans with balances exceeding the conforming limit, remained at 3.26 percent, with points increasing to 0.39 from 0.32. The effective rate increased to 3.37 percent. 

Thirty-year FRM backed by the FHA had an average rate of 3.23 percent compared to 3.18 percent a week earlier. Points increased 0.41 from 0.31 and the effective rate was 3.35 percent.

The rate for 15-year FRM was 2.56 percent, up 4 basis points week-over-week. Points rose to 0.36 from 0.33 and the effective rate was 2.65 percent.

The average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) increased to 2.89 percent from 2.82 percent, with points decreasing to 0.16 from 0.25. The effective rate increased to 2.95 percent. The ARM share of activity was 3.2 percent, up from 3.1 percent the previous week.

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.