WASHINGTON, D.C. – (RealEstateRama) – Mortgage applications increased 21.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 9, 2019.
The Market Composite Index, a measure of mortgage loan application volume, increased 21.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 20 percent compared with the previous week. The Refinance Index increased 37 percent from the previous week to its highest level since July 2016, and was 196 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 12 percent higher than the same week one year ago.
“The 2019 refinance wave continued, as homeowners last week responded to extraordinarily low mortgage rates. Fears of an escalating trade war, combined with economic and geopolitical concerns, once again pulled U.S. Treasury rates lower. The 30-year fixed mortgage rate decreased eight basis points to 3.93 percent – the lowest level since November 2016 – and has now dropped more than 80 basis points this year,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “In just the last two weeks, rates have decreased 15 basis points and the refinance index has increased more than 50 percent, reaching its highest level since July 2016. The government refinance index, driven by a 25 percent increase in VA refinance applications, is now at its highest level since May 2013.”
Added Kan, “Purchase applications also benefited from these lower rates, with activity increasing 1.9 percent last week and 12 percent from a year ago.”
The refinance share of mortgage activity increased to 61.4 percent of total applications from 53.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.0 percent of total applications.
The FHA share of total applications decreased to 9.5 percent from 11.0 percent the week prior. The VA share of total applications decreased to 12.2 percent from 12.8 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to its lowest level since November 2016, 3.93 percent, from 4.01 percent, with points decreasing to 0.35 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to its lowest level since November 2016, 3.88 percent, from 3.96 percent, with points decreasing to 0.24 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to its lowest level since November 2016, 3.81 percent, from 3.86 percent, with points decreasing to 0.29 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to its lowest level since November 2016, 3.28 percent, from 3.37 percent, with points decreasing to 0.34 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.43 percent from 3.36 percent, with points decreasing to 0.35 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
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The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
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