Mortgage applications rose by 23.5% on a seasonally-adjusted basis over the week ending January 4th, 2019, according to the Mortgage Bankers Association (MBA)’s latest Weekly Mortgage Applications Survey. This week’s survey includes an adjustment for the New Year’s Day holiday.
On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application volume, rose by 68% from the previous week. The Refinance Index rose by 35% over the same period. The seasonally-adjusted Purchase Index rose 17% from one week earlier, while the unadjusted Index rose 59%.
“Mortgage rates fell across the board last week and applications rebounded sharply, after what was a slower than usual holiday period. The 30-year fixed-rate mortgage declined 10 basis points to 4.74 percent, the lowest since April 2018, and other loan types saw rate decreases of between 9 and 20 basis points,” says Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
The refinance share of mortgage activity rose to its highest level since February 2018 at 45.8%, up from 42.7% the previous week. The adjustable-rate mortgage (ARM) share of activity rose to 8.4% of total applications. The FHA share of applications rose to 10.3% from 10.0%, the VA share rose to 11.6% from 11.0% - the highest level since March 2017 – and the USDA share remained unchanged at 0.6%.
“This drop in rates spurred a flurry of refinance activity – particularly for borrowers with larger loans – and pushed the average loan size on refinance applications to the highest in the survey (at $339,800). The surge in refinance activity also brought the refinance index to its highest level since last July,” Kan says. “Purchase applications had their strongest week in a month, finishing over four percent higher than a year ago, as both conventional and government purchase activity bounced back with solid gains after a sluggish holiday season.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) fell to its lowest level since April 2018 at 4.74%, down from 4.84% the previous week. Points for 80% loan-to-value ratio (LTV) loans rose to 0.47 from 0.42. (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 $484,350) fell to its lowest level since February 2018 at 4.52%, down from 4.72%. Points for 80% LTV loans fell to 0.28 from 0.30, and the effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to its lowest level since April 2018 at 4.70%, down from 4.86%. Points for 80% LTV loans fell to 0.47 from 0.54, and the effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages fell to its lowest level since April 2018 at 4.16%, down from 4.25%. Points for 80% LTV loans fell to 0.35 from 0.60, and the effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs fell to its lowest level since August 2018 at 4.05%, down from 4.16%. Points for 80% LTV loans fell to 0.32 from 0.34, and the effective rate decreased from last week.
