MBA: Mortgage applications increase 1.6%

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Mortgage applications increased 1.6% for the week ending Dec. 7, 2018, according to new data from the Mortgage Bankers Association’s weekly Mortgage Applications Survey.

Mortgage rates fell across the board last week, driven by a similar slide in Treasuries. Trade fears dominated investors’ concerns for another week, and this was amplified by data released by the U.S. Commerce Department showing a widening trade deficit,” MBA’s Associate Vice President of Economic and Industry Forecasting Joel Kan said. “The 30-year fixed mortgage rate decreased 12 basis points over the week back below 5%, representing the largest single week drop since 2017.”

On an unadjusted basis, the Mortgage Composite index increased 1.6% from the previous week.

“As a result of these recent rate declines, we saw another weekly increase in refinance applications, along with a rise in the average refinance loan size,” Kan said. “Larger loans tend to react more readily for a given change in mortgage rates. Meanwhile, purchase application activity also increased over the week and was up more than 3% compared to a year ago.”

The Refinance Index rose 2% from the previous week, and the unadjusted Purchase Index fell 2% from last week and was 4% higher the same week in 2017. The seasonally adjusted Purchase Index pushed forward 3% from the previous week.

The refinance share of mortgage activity grew to 41.5% of total applications, up from 40.4% the week before. Notably, this is the highest reading since March of this year.

The adjustable-rate mortgage share of activity increased to 7.6% of total applications.

The Federal Housing Administration share of mortgage apps increased from last week’s 10.2% to 10.8%, and the Veterans Affairs’ share of applications also grew, rising from 10% the previous week to 10.2% this week.

The Department of Agriculture share of total applications move forward, increasing from 0.6% last week to 0.7% this week.

The MBA reported that mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.96% from 5.08% the previous week. This is the lowest reading since September 2018.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) decreased from last week’s 4.89% to 4.80% this week.  This happens to be the lowest reading since September 2018, as well.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell from 5.05% last week to 4.97% this week. Once again, this is the lowest reading since September of this year.

The average contract interest rate for 15-year fixed-rate mortgages fell, decreasing from 4.5% last week to 4.41% this week. This percentage is also the lowest reading since September.

Lastly, the average contract interest rate for 5/1 ARMs retreated to 4.24%, down from 4.33% last week.

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