It was another week of decline for mortgage applications as those for home purchase slid for the fifth week in a row. The overall volume of applications, as measured by the Mortgage Bankers Association's (MBA's) Market Composite Index, declined by 2.0 percent on a seasonally adjusted basis during the week ended August 10. On an unadjusted basis the volume lost 3 percent compared to the prior week.
The seasonally adjusted Purchase Index decreased by 3 percent and was down 4 percent unadjusted. The unadjusted version was also 3 percent lower than during the corresponding week in 2017.
The Refinancing Index did stabilize, remaining at the same level as the previous week. The share of total applications designated for refinancing rose 1 percentage point to 37.6 percent.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
The distribution of applications across product types was unchanged from the week ended August 3. The FHA share was 10.4 percent, VA loans were at 10.6 percent and USDA loans received 0.8 percent of the total.
Contract interest rates were lower for all loan types with the exception of the 15-year fixed-rate mortgage (FRM), although the direction of effective rates was slightly more mixed. The 15-year rate increased only slightly, from 4.26 to 4.27 percent. Points rose to 0.52 from 0.48 and the effective rate was higher.
The average contract interest rate for 30-year FRM with origination balances at or under the conforming limit of $453,100 or less declined 3 basis points to 4.81 percent. Points averaged 0.43 compared to 0.45 the prior week and the effective rate declined.
The jumbo 30-year FRM, loans with balances exceeding the conforming limit, had an average rate of 4.73 percent with 0.29 point. Last week's report put that rate at 4.74 percent with 0.39 point. The effective rate was also down.
FHA backed 30-year FRM posted the most significant week-over-week change in its contract rate, declining from 4.83 percent to 4.77 percent. Points decreased to 0.68 from 0.76 and the effective rate move lower.
The average rate for 5/1 adjustable rate mortgages (ARMs) backed off 1 basis point to 4.06 percent while points rose from 0.42 to 0.48 pushing the effective rate higher. The adjustable-rate mortgage (ARM) share of activity decreased to 6.2 percent of total applications from 6.3 percent the previous week.
MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential mortgage 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.
