Mortgage applications rose by 5.3% on a seasonally-adjusted basis from one week earlier for the week ending February 22nd, 2019, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. This week’s report includes an adjustment for the Presidents’ Day holiday.
On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application volume, fell by 3% from the previous week. The Refinance Index rose by 5% over the same period. The seasonally-adjusted Purchase Index rose 6%, while the unadjusted Index fell 1%.
The refinance share of mortgage activity fell to 40.4% of total applications, down from 41.7% the previous week. The adjustable-rate mortgage (ARM) share of mortgage activity fell to 7.3% of total applications. The FHA share remained unchanged at 10.2%, the VA share rose to 10.7% from 10.1%, and the USDA share fell to 0.6% from 0.7%.
“Mortgage rates were little changed last week, but as we anticipated, homebuyers are responding favorably to this more stable rate environment,” says Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Purchase applications for both conventional and government loans rose last week, with the government gain led by a 14 percent increase in applications for VA purchase loans.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) fell to 4.65% from 4.66% the previous week. Points for 80% loan-to-value ratio (LTV) loans remained unchanged at 0.42. (All 80% LTV loans 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 $484,350) fell to 4.40% from 4.56% the previous week. Points for 80% LTV loans rose to 0.29 from 0.23, and the effective rate decreased from last week.
“Refinance application volume increased as well, with the index reaching its highest level in a month. Borrowers with larger loans tend to be more responsive for a given drop in rates, and competition for these loans is fierce. Therefore, it was not surprising to see the average rate for a 30-year fixed jumbo loan drop to its lowest level since January 2018,” Fratanoni added.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 4.64% from 4.68%. Points for 80% LTV loans fell to 0.48 from 0.58, and the effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages fell to 4.00% from 4.04% the previous week. Points for 80% LTV loans fell to 0.38 from 0.44, and the effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs fell to 3.95% from 4.00%. Points for 80% LTV loans rose to 0.4 from 0.24, and the effective rate increased from last week.
