Mortgage application volume eked out a slight gain during the week ended October 11 as interest rates became mixed. Purchasing weakened while the volume increase was again driven by refinancing activity.
The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, rose 0.5 percent on a seasonally adjusted basis from one week earlier and was 1 percent higher before adjustment. The Refinance Index gained 4 percent and was 199 percent higher than the same week in 2018. The refinance share of mortgage activity increased to 62.2 percent of total applications from 60.4 percent the previous week
Both the seasonally adjusted and the unadjusted Purchase Indices dropped by 4 percent from their level during the week ended October 4. The unadjusted Index was 12 percent higher than it was a year earlier.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
"The ongoing interest rate volatility is impacting a borrowers' ability to lock in the lowest rate possible. Despite a slight rise in mortgage rates last week, refinance applications increased 4 percent and were 199 percent higher than a year ago," said Joel Kan, Associate Vice President of Economic and Industry Forecasting. "Purchase applications slowed for the second week in a row. While near term economic uncertainty is still a factor, other fundamental issues, such as a lack of housing inventory in many markets, is preventing purchase activity from meaningfully rising. However, purchase applications were still much higher than a year ago. This is a reminder that the purchase environment in 2019 continues to be stronger than in 2018."
The FHA share of total applications jumped 1 percentage point from a week earlier to 11.3 percent and the VA share of total applications rose to 12.9 percent from 12.3 percent. The USDA share slipped to 0.4 percent from 0.5 percent. The average size of a mortgage rose from $328,600 the previous week to $329,900 and purchase loan balances grew to $332,100 from $330,600.
Mortgage rates were mixed 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 limit of $484,350 increased to 3.92 percent from 3.90 percent. Points dipped to 0.35 from 0.37 and the effective rate increased.
Jumbo 30-year FRM, loans with balances greater than the conforming limit, had a rate of 3.90 percent, unchanged from the previous week. Points declined to 0.23 from 0.28, lowering the effective rate.
The average contract interest rate for 30-year FRM backed by the FHA increased to 3.77 percent from 3.75 percent, with points decreasing to 0.19 from 0.29. The effective rate moved lower.
Fifteen-year FRM had a rate of 3.32 percent with 0.31 point. The prior week the rate was 3.35 percent with 0.30 point and there was a higher effective rate.
The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) increased to 3.37 percent from 3.25 percent, with points decreasing to 0.23 from 0.34. The effective rate increased from last week. The ARM share of activity increased to 5.5 percent of total applications from 5.3 percent a week earlier.
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.
