WASHINGTON, D.C. – (RealEstateRama) – – Mortgage applications decreased 1.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 12, 2019. Last week’s results included an adjustment for the Fourth of July holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 24 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week and was 87 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index increased 21 percent compared with the previous week and was 7 percent higher than the same week one year ago.
“Mortgage rates increased across the board, with the 30-year fixed rate mortgage rising to its highest level in a month to 4.12 percent, which is still below this year’s average of 4.45 percent,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Coming out of the July 4th holiday, applications were lower overall, with purchase activity slipping almost 4 percent. Refinance applications increased, with activity reaching its highest level in a month, driven mainly by FHA applications. Historically, government refinance activity lags slightly in response to rate changes.”
Added Kan, “Buyer interest at the start of the second half of the year continues to outpace year ago levels, with activity last week up 7 percent.”
The refinance share of mortgage activity increased to 50.0 percent of total applications from 48.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.9 percent of total applications.
The FHA share of total applications increased to 10.6 percent from 10.1 percent the week prior. The VA share of total applications decreased to 12.9 percent from 13.2 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.12 percent from 4.04 percent, with points increasing to 0.38 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) increased to 4.07 percent from 4.03 percent, with points decreasing to 0.21 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.01 percent from 3.97 percent, with points decreasing to 0.28 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.48 percent from 3.42 percent, with points remaining unchanged at 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.58 percent from 3.56 percent, with points decreasing to 0.27 from 0.28 (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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