Last week's rally in mortgage application activity was just that, last week's. The Mortgage Bankers Association (MBS) said today that the number of applications for both refinancing and purchase mortgages fell during the week ended September 19, erasing many of the gains made during the week ended September 12.
The MBA's Market Composite Index, a measure of mortgage application volume, was down 4.1 percent on a seasonally adjusted basis compared to the previous week. On an unadjusted basis the decrease was 5.0 percent.
The Refinance Index fell 7 percent from the previous week. Fifty-six percent of all mortgage applications made during the week were for refinancing. The previous week the share was 57 percent.
Purchase Index vs 30 Yr Fixed
Applications for mortgages to purchase a home pulled back to a lesser extent. The seasonally adjusted Purchase Index was 0.3 percent below the level of the previous week while the unadjusted Purchase Index was 2 percent lower than a week earlier and was down 16 percent from the same week in 2013.
Refinance Index vs 30 Yr Fixed
There were slight increases in the contract interest rate for all mortgage products and the effective rate increased for all but the 15 year fixed-rate mortgage (FRM). The average contract rate for the 30-year FRM with conforming loan balances ($417,000 or less) was 4.39 percent, the highest rate since May 2014, up from 4.36 percent the previous week. Points increased to 0.35 from 0.20.
There was a six basis point gain in the jumbo 30-year FRM (loan balances over $417,000) to 4.30 percent. Points increased from 0.16 to 0.22.
Thirty-year FRM backed by the FHA rose to 4.08 percent with 0.09 point from 4.03 with 0.05 point. This rate was the highest for an FHA guaranteed loan since May.
The rate for 15-year FRM was unchanged at 3.56 percent. Points increased from 0.25 to 0.26.
The adjustable-rate mortgage (ARM) share of mortgage applications increased from 7.6 percent of all applications to 8.0 percent. The contract interest rate for 5/1 ARMs rose 1 basis points to 3.20 percent with points increasing to 0.40 from 0.29.
MBA's application and interest rate information is derived from its Weekly Mortgage Application Survey which it has conducted since 1990. The survey covers over 75 percent of the retail residential market with respondents including mortgage bankers, commercial banks, and thrifts. Interest rates assume a mortgage with an 80 percent loan-to-value ratio and points include the origination fee.