Last week was another down week for mortgage applications according to the Mortgage Bankers Association (MBA).  Its Weekly Mortgage Applications Survey data for the week ended September 26 showed a 0.2 percent decrease in applications as reflected in its seasonally adjusted Market Composite Index.  Compared with the previous week the decline in the unadjusted index was twice as large.

MBA's Refinance Index was down 0.3 percent from the week ended September 19 and applications for refinancing comprised 56 percent of total loan applications.  That share was unchanged from the previous week.

Refinance Index vs 30 Yr Fixed

Applications for home purchases were unchanged from the previous week on a seasonally adjusted basis but were down 1 percent on an unadjusted basis.  The unadjusted Purchase Index was 11 percent lower than during the same week in 2013.  The seasonally adjusted conventional purchase index increased 1.3 percent to the highest level since July.

Purchase Index vs 30 Yr Fixed

Application volume slipped despite lower contract and effective interest rates for all fixed rate mortgages (FRM). The average contract rate for 30-year conventional FRM, those with balances of $417,000 or less, was 4.33 percent with 0.31 point.  The previous week the rate was 4.39 percent with 0.35 point. 

Jumbo 30-year FRM, loans with balances over $417,000 declined by 2 basis points to 4.28 percent.  Points decreased from 0.22 the previous week to 0.15.

Interest rates on the 30-year FRM backed by the FHA eased down by 1 basis point to an average of 4.07 percent and points decreased to 0.04 from 0.09. 

Fifteen-year FRM had an average contract rate of 3.55 percent, down from 3.56 percent the previous week.  Points were unchanged at 0.26.

The average rate for a 5/1 hybrid adjustable rate mortgage (ARM) jumped from 3.20 percent to 3.31 percent and points increased from 0.40 to 0.51.  The effective rate increased.  ARMs had a 7.6 percent share of all applications during the week, down from 8 percent the previous week.

MBA's weekly survey has been conducted since 1990 and covers 75 percent of retail residential mortgage applications in the U.S.  Survey respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes in March 16, 1990=100.  Interest rate information assumes a mortgage with an 80 percent loan-to-value ratio and points include the origination fee.