The pace of mortgage applications picked up during the week ended April 13, ending a two-week slide. The Mortgage Bankers Association (MBA) reported its indices for both purchase mortgages and refinances improved significantly compared to the week ended April 6.
The Market Composite Index a measure of total application volume, increased 4.9 percent on a seasonally adjusted basis and was 6 percent higher without adjustment. The Purchase Index was also up 6 percent seasonally adjusted and rose 7 percent compared to the previous week on an unadjusted basis. The unadjusted index, which had fallen below the level for the same week in 2017 in the prior report, was 10 percent higher than its 2017 counterpart.
The Refinance Index was also up, increasing 4 percent compared to the previous week, but the refinancing share of activity continued to decline. It accounted for 37.6 percent of total applications, the lowest since September 2008, down from 38.4 percent the previous week.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
Loan applications, when apportioned across product types, continue to bounce around within narrow ranges. The FHA share of total applications decreased to 10.6 percent from 11.0 percent and the VA share dipped to 10.4 percent from 10.9 percent. USDA applications remained stuck at what appears to be a near-permanent 0.8 percent share.
The interest rates reported by MBA were all over the place. Most contract rates were unchanged from the week before while points and effective rates for most product types moved higher.
The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $453,100 or less was unchanged at 4.66 percent, and points were unchanged at 0.46. Nonetheless the effective rate increased.
The average contract interest rate for 30-year FRM with jumbo loan balances exceeding the conforming loan limit was unchanged at 4.53 percent. Points increased to 0.38 from 0.31 and the effective rate was higher.
The FHA-backed 30-year FRM was the only contract fixed-rate to move higher, increasing to 4.70 percent from 4.66 percent. However, the effective rate moved lower as points declined to 0.53 from 0.76.
Fifteen-year FRM rates were unchanged at 4.08 percent. Points decreased to 0.47 from 0.50 and the effective rate also declined.
Rates for 5/1 adjustable rate mortgages (ARM) increased to an average of 3.94 percent, up 1 basis points, while points dropped to 0.43 from 0.60. The effective rate was down. The ARM share of activity increased to 6.6 percent of total applications from 6.3 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 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.