Mortgage activity during the week ended November 29 was predictably impacted by the Thanksgiving Day holiday which effectively shortened the business week to three days. The Mortgage Bankers Association (MBA) says its data on application volume contains an adjustment to account for the holiday. MBA's Market Composite Index, a measure of that volume, fell by 9.2 percent on a seasonally adjusted basis from one week earlier and was down 38 percent on an unadjusted basis.
The Refinance Index decreased 16 percent from the week ended November 22 but was still 61 percent higher than the same week one year ago which did not contain a holiday. The refinance share of mortgage activity decreased to 59.0 percent of total applications from 62.0 percent the previous week.
The seasonally adjusted Purchase Index increased 1.0 percent week-over-week but was down 33 percent on an unadjusted basis. Application activity was 24 percent lower than the same week in 2018. .
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
"U.S. Treasury rates stayed flat last week, as uncertainty surrounding the U.K. elections offset positive domestic news on consumer spending," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Despite the 30-year fixed rate remaining unchanged at 3.97 percent, mortgage applications fell last week, driven down by a 16 percent drop in refinances. Purchase applications were up slightly but declined 24 percent from a year ago. This week's year-over-year comparisons were distorted by Thanksgiving being a week later this year."
Added Kan, "The purchase market overall looks healthy as we enter the home stretch of 2019. The seasonally adjusted purchase index was at its highest level since July, as a combination of wage gains, slower home-price appreciation, and slightly easing inventory conditions continue to support increased activity."
Purchase applications had an average loan size of $334,300. The average balance overall was $316,500.
The FHA share of total applications increased to 12.0 percent from 11.7 percent and the VA share dipped to 12.7 percent from an unusually high 14.1 percent the previous week. The USDA share was unchanged at 0.5 percent.
The average contract interest rate for 30-year fixed-rate mortgages (FRM) with loan balances at or below the conforming limit of $484,350 was unchanged from the prior week at 3.97 percent. Points rose to 0.32 from 0.30 and the effective rate was higher.
The rate for jumbo 30-year FRM, loans with origination balances exceeding the conforming limit, increased to 3.91 percent from 3.87 percent. Points fell to 0.26 from 0.29 and the effective rate increased.
Thirty-year FRM backed by the FHA had an average rate of 3.83 percent with 0.31 point. The previous week the rate was 3.79 percent, with 0.23 point. The effective rate rose compared to the prior week.
There was a 1 basis point decline in the average rate for 15-year FRM, to 3.37 percent. Points increased to 0.28 from 0.27 but the effective rate still moved lower.
The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 3.28 percent from 3.42 percent, with points increasing to 0.27 from 0.22. The effective rate declined. The ARM share of activity was unchanged at 4.8 percent of total applications.
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.