The Mortgage Bankers Association (MBA) reported that, as usually occurs during a holiday week, mortgage applications declined significantly during the week ended September 11.  The business week was shortened by the Labor Day holiday on Monday and both seasonally adjusted and unadjusted numbers were down. It was the second week in a row for across the board declines for the weekly numbers so it is unclear whether the downturn was totally a result of the holiday disruption, or if some other factor was in play (such as variations in school schedules).

MBA's Market Composite index, a measure of application volume fell by 7.0 percent from the week ended September 4 and was down 17 percent on an unadjusted basis.  Data is adjusted to account for the holiday. .

The Refinance Index was down 9 percent from a week earlier and the share of total applications accounted for by refinancing dipped to 56.2 percent from 56.9 percent.  The seasonally adjusted Purchase Index declined 4 percent and the unadjusted Index was 16 percent lower week-over-week and 5 percent higher than a year earlier. The smallest annual increase since March was a function of Labor Day occurring a week later this year than last, also MBS's explanation for the 41 percent increase in the index during the week ended September 4.  

Refinance Index vs 30 Yr Fixed

Purchase Index vs 30 Yr Fixed

The FHA share of total applications increased to 14.2 percent from 13.4 percent the previous week and the VA share dropped 0.1 point to 10.7 percent.  The USDA share of total applications was unchanged from 0.8 percent the week prior.

When averaged for the week interest rates were mixed but largely unchanged from averages the week before.  The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) eased back by 1 basis point to 3.09 percent while a higher effective rate reflected an increase in points from 0.39 to 0.42 from 0.39.

The rate for 30-year FRM with jumbo loan balances in excess of $417,000 increased to 4.04 percent from 4.03 percent.  Points declined to 0.26 from 0.28 while the effective rate remained unchanged.

Thirty-year fixed-rate mortgages backed by the FHA had an average rate down 2 basis points to 3.88 percent.  Points jumped to 0.35 from 0.23, increasing the effective rate from the prior week.

The average rate for 15-year fixed-rate mortgages dipped to 3.33 percent from 3.34 percent, with points decreasing to 0.26 from 0.28. The effective rate decreased from the prior week.

Adjustable-rate mortgage (ARM) applications claimed a 6.8 percent share of the total compared to 6.9 percent the previous week.  The average contract interest rate for 5/1 ARMs eked out a 0.01 point increase while points moved to 0.36 from 0.27, increasing the effective rate from the previous week.

MBA's data is collected through its Weekly Mortgage Applications Survey which covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted since 1990. Survey 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 mortgages with an 80 percent loan to value ratio and points that include the origination fee.