Although changes in mortgage rates were gradual and mixed during the week ended September 20, mortgage volume moved sharply lower. Refinancing was especially hard hit. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, decreased 10.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index was 11 percent lower than the previous week.

The Refinance Index fell by 15 percent from its level during the week ended September 13 although activity was 104 percent higher than the same week in 2018. The refinance share of mortgage activity decreased to 54.9 percent from 57.9 percent the previous week.  

The seasonally adjusted Purchase Index declined by 3.0 percent and the unadjusted version lost 4.0 percent.  The latter was 9.0 percent higher than the comparable period a year earlier.


Refi Index vs 30yr Fixed



Purchase Index vs 30yr Fixed



"U.S. Treasury yields trended downward over the course of last week, as the Federal Reserve meeting highlighted the elevated uncertainty in the economic outlook. However, despite falling yields, mortgage rates ticked up again and have risen 20 basis points over the past two weeks," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "The increase in rates led to fewer refinances, and activity has now dropped 17 percent over the last two weeks." 

Added Kan, "Purchase applications also decreased, likely related to the two-week jump in rates, but still remained 9 percent higher than last year. The recent data on increased existing-home sales and new residential construction points to the underlying strength in the purchase market this fall." 

The FHA share of total applications increased to 11.4 percent from 10.9 percent the previous week and VA loans accounted for 13.1 percent compared to 12.7 percent.  The USDA share was unchanged from 0.6 percent.  The average size of a loan was $321,500 and purchase loans averaged $329,400.

While rates have been moving up, the change last week was small and not all products were affected. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with origination balances at or below the conforming limit of $484,350 increased to 4.02 percent from 4.01 percent, with points increasing to 0.38 from 0.37. The effective rate was also higher.   

Jumbo 30-year FRM, loans with balances exceeding the conforming loan limit, had an average rate of 4.00 percent with 0.26 points, a slight decrease from 4.01 percent with 0.26 point a week earlier.  The effective rate decreased. 

The average contract interest rate for 30-year FRM backed by the FHA increased 1 basis point to 3.90 percent.  Points declined to 0.23 from 0.30 and the effective rate moved lower.  

The average contract interest rate for 15-year FRM increased to 3.46 percent from 3.42 percent, with points unchanged at 0.36. The effective rate increased from last week.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) was 3.39 percent, down from 3.54 percent the prior week. Points were unchanged at 0.29 and the effective rate moved lower.  The ARM share of activity increased to 5.1 percent of total applications from 5.0 percent the prior week..

MBA's Weekly Mortgage Applications Survey 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.