The Mortgage Bankers Associations Market Composite Index, out Wednesday, increased 21.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 20% compared with the previous week. The Refinance Index increased 37% from the previous week to its highest level since July 2016, and was 196% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2% from one week earlier. The unadjusted Purchase Index increased 1% compared with the previous week and was 12% higher than the same week one year ago.
“The 2019 refinance wave continued, as homeowners last week responded to extraordinarily low mortgage rates. Fears of an escalating trade war, combined with economic and geopolitical concerns, once again pulled U.S. Treasury rates lower. The 30-year fixed mortgage rate decreased eight basis points to 3.93% – the lowest level since November 2016 – and has now dropped more than 80 basis points this year,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “In just the last two weeks, rates have decreased 15 basis points and the refinance index has increased more than 50%, reaching its highest level since July 2016. The government refinance index, driven by a 25% increase in VA refinance applications, is now at its highest level since May 2013.”
Added Kan, “Purchase applications also benefited from these lower rates, with activity increasing 1.9% last week and 12% from a year ago.”
The refinance share of mortgage activity increased to 61.4% of total applications from 53.9% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.0% of total applications.
The FHA share of total applications decreased to 9.5% from 11.0% the week prior. The VA share of total applications decreased to 12.2% from 12.8% the week prior. The USDA share of total applications decreased to 0.5% from 0.6% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to its lowest level since November 2016, 3.93%, from 4.01%, with points decreasing to 0.35 from 0.37 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. 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) decreased to its lowest level since November 2016, 3.88%, from 3.96%, with points decreasing to 0.24 from 0.26 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to its lowest level since November 2016, 3.81%, from 3.86%, with points decreasing to 0.29 from 0.38 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to its lowest level since November 2016, 3.28%, from 3.37%, with points decreasing to 0.34 from 0.37 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.43% from 3.36%, with points decreasing to 0.35 from 0.36 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
