Mortgage Application Volume Returns to Downhill Track


One week after posting the first positive results in
five weeks, mortgage application activity fell off again.  The Mortgage Bankers Association (MBA) said
today that its Market Composite Index, a measure of application volume,
decreased 0.6 percent on a seasonally adjusted basis during the week ended May
11.  On an unadjusted basis the decline
was 1.0 percent.

Both the adjusted and unadjusted Purchase Indices dipped
1.0 percent from the previous week.
unadjusted index was 7.0 percent higher than during the same week in 2018.

The Refinance Index was also decreased by 1.0 percent
but the share of applications that were for refinancing remained at the same
37.9 percent as during the week ended May 3.

applications declined slightly last week but still remained almost 7 percent
higher than a year ago,” said Joel Kan, MBA’s Associate Vice President of
Economic and Industry Forecasting. “Despite the third straight decline in
mortgage rates, refinance applications decreased for the fifth time in six
weeks, albeit by less than 1 percent.”


Refi Index vs 30yr Fixed



Purchase Index vs 30yr Fixed




Added Kan,
“It’s worth watching if ongoing global trade disputes lead to increased anxiety
about the economy, which could cause some potential homebuyers to put off their
home search until the uncertainty is resolved

share of total applications
increased to 10.1 percent from 9.5 percent the previous
week while the VA share declined to 10.6 percent from 11.1 percent.  The USDA share of applications appears to
have taken up permanent residency at 0.6 percent.

interest rates declined for all fixed-rate products on both a contract and an
effective basis.  The average contract
interest rate for 30-year fixed-rate mortgages (FRM) with origination balances
at or below the conforming loan limit of $484,350 decreased to 4.40 percent
from 4.41 percent.  Points dropped to 0.40
from 0.47.

The rate for
jumbo 30-year FRM, loans with balances higher than the conforming limit, decreased
to 4.24 percent from 4.27 percent. Points rose to 0.27 from 0.23.

The average
contract interest rate for 15-year FRM decreased by 4 basis points to 3.78
percent.  Points rose to 0.43 from 0.42.

The largest
week-over-week change was in the average rate for FHA-backed 30-year FRM.  The average for those loans decreased to 4.32
percent with 0.49 point from 4.44 percent with 0.56 point the previous week.

The average
contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to
3.82 percent from 3.88 percent but an increase in points from 0.26 to 0.44 drove
the effective rate higher. The ARM share of activity ticked down from 6.4
percent of total applications to 6.3 percent.  

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.

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