Despite persistently low rates, consumers are not feeling too motivated to apply for home loans. The Mortgage Bankers Association
said mortgage applications during the week ended August 12 fell for the fourth
time in the last five weeks.
Market Composite Index, a measure of loan application volume, was 4.0 percent
below its level a week earlier on a seasonally adjusted basis and 5 percent
unadjusted. Applications for both purchasing and refinancing were about equally
responsible for the decline with the refinance index also decreasing 4.0
percent from a week earlier and the seasonally adjusted Purchase Index down 4.0
percent to its lowest level since February 2016. The unadjusted Purchase Index dropped by 5.0
percent from a week earlier but remained 10 percent higher than during the same
week in 2015.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
refinancing share of mortgage applications ticked up to 62.6 percent from 62.4
percent a week earlier. The portion of
applications that were for FHA loans fell to 9.6 percent form 10.0 percent
while VA applications rose by 0.2 points to 13.2 percent. USDA applications were unchanged at 0.6
Both contract and effective interest rates
were down for all mortgage product types tracked by MBA. The average contract interest rate for
30-year fixed rate mortgages (FRM) with conforming loan balances ($417,000 or
less) eased back by 1 basis point to 3.64.
Points also decreased, from 0.34 to 0.31.
The average contract interest rate for
30-year FRM with jumbo loan balances (greater than $417,000) declined from 3.64
percent with 0.31 point during the week ended August 5 to 3.60 percent with
Thirty-year FRM by the FHA had an average
rate of 3.49 percent, down from 3.52 percent a week earlier. Average points were 0.28 compared to 0.33.
There was a 3 basis point dip in the
average rate for 15-year FRM bring it to 2.90 percent. Points decreased to 0.32 from 0.34.
The adjustable-rate mortgage (ARM) share
of activity decreased to 4.6 percent of total applications from 4.7 percent and
the lowest share for ARMs in at least three years. The average contract
interest rate for 5/1 ARMs increased to 2.85 percent from 2.81 percent, with
points decreasing to 0.17 from 0.32.
MBA’s Weekly Mortgage Applications Survey
has been conducted since 1990 with respondents including mortgage bankers,
commercial banks, and thrifts. It covers
over 75 percent of all U.S. retail residential mortgage applications. Base
period and value for all indexes is March 16, 1990=100 and interest rate data
presumes loans with an 80 percent loan-to-value ratio and points that include
the origination fee.