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. The 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.
"Purchase 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."
The FHA 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.
Mortgage 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.
