Mortgage application activity continued to shrink during the week ended November 9. The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage application volume dropped by 3.2 percent on a seasonally adjusted basis when compared to its level on November 2. The index has declined by an aggregate of 9.7 percent since it posted its last increase back on October 19. On an unadjusted basis the index was down 5 percent.
The Purchase Index also continued its downhill trend, decreasing 2.3 percent on an adjusted basis to its lowest level since February 2017. The unadjusted Purchase Index fell 5 percent week-over-week and was 3.0 percent lower than the same week in 2017.
The Refinance Index decreased 4.3 percent from the previous week to an 18 year low (December 2000). The share of refinancing applications ticked up from 39.1 percent of the total to 39.4 percent.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
"Recent volatility in the financial markets and increasing rates continue to adversely impact mortgage application activity, even as the general economic outlook remains positive," said Joel Kan, MBA's AVP of Economic and Industry Forecasting. "Both home purchase and mortgage refinance applications decreased over the week, driven largely by declines in conventional applications. Mortgage rates increased over the week for most loan types, with the 30-year fixed rate mortgage increasing to 5.17 percent - the highest level since 2010."
The allocation of applications across loan types shifted slightly toward FHA loans, with that share of the total rising from 10.1 percent to 10.6 percent. The VA and USDA shares were unchanged from 10.1 percent and 0.7 percent respectively. The median loan size for all mortgages declined from $292,800 to $290,400 and for purchase mortgages from $310,700 to $306,300.
The average contract interest rate for 30-year fixed-rate mortgages (FRM) with origination balances at or below the conforming limit of $453,100 increased to 5.17 percent from 5.15 percent, with points increasing to 0.55 from 0.51. The effective rate was also higher.
The rate for jumbo 30-year FRM, loans with balances exceeding the conforming limit, ticked up 1 basis point to 4.98 percent and points increased to 0.28 from 0.27. The effective rate also crept higher.
The interest rate for 30-year FRM backed by the FHA bucked the general rate trend, dropping from 5.15 percent to 5.08 percent. Points also moved lower, from 0.64 to 0.55, as did the effective rate.
Fifteen-year FRM had an average rate of 4.57 percent with 0.56 point. The previous week the rate was 4.55 percent with 0.51 point. The effective rate also increased.
The average interest rate for 5/1 adjustable rate mortgages (ARMs) was 4.45 percent with 0.31 point, up from 4.36 percent with 0.35 point the prior week, and the effective rate moved higher. The ARM share of applications dipped to 7.7 percent from 7.8 percent.
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.