Mortgage applications fell by 9.8% on a seasonally-adjusted basis over the two –week period ending December 28, 2018, according to the Mortgage Bankers Association’s latest Weekly Mortgage Applications Survey.
The results include an adjustment for the Christmas holiday. The mortgage index data covers the previous two weeks, while the compositional data and interest rate measures are relative only to the previous week.
On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application volume, fell by 46% over the previous two weeks. The Refinance Index fell 12% over the same period. The seasonally-adjusted Purchase Index fell 8% from two weeks earlier, and the unadjusted Index fell 46%.
“Mortgage applications fell over the past two weeks – even as the 30-year fixed-rate mortgage decreased to 4.84 percent, its lowest since September 2018. Investors continued to show a preference for safer U.S. Treasuries, as concerns over U.S. and global economic growth, along with uncertainty over the current government shutdown, drove rates lower,” says Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
The refinance share of mortgage activity, which is relative only to the previous week, fell to 42.7% of total applications from 43.6% the previous week. The adjustable-rate (ARM) share of activity remained unchanged at 7.6%. The FHA share of total applications rose to 10.0% from 9.7%, the VA share rose to 11.0% from 10.1%, and the USDA share fell to 0.6% from 0.7%.
“Even with lower borrowing costs, both purchase and refinance applications decreased over the two-week holiday period, as both conventional and government applications dropped,” says Kan. “Part of the decline in mortgage applications was possibly because of the government shutdown, as concerns over delays in FHA application processing times likely contributed to the weakness in activity.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) fell to 4.84% from 4.86% the previous week. Points for 80% loan-to-value ratio (LTV) loans fell to 0.42 from 0.47. (All 80% LTV loan reports include the origination fee.) The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) rose to 4.72% from 4.59%. Points for 80% LTV loans rose to 0.30 from 0.28, and the effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 4.86% from 4.91%. Points for 80% LTV loans fell to 0.54 from 0.57, and the effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages fell to 4.25% from 4.31%. Points for 80% LTV loans rose to 0.60 from 0.50, and the effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 4.16% from 4.23%. Points for 80% LTV loans fell to 0.34 from 0.36, and the effective rate decreased from last week.
