Mortgage applications decreased 2.2% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending November 15, 2019. This week’s results include an adjustment for the Veterans Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 2.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 14% compared with the previous week. The Refinance Index decreased 8% from the previous week and was 152% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 7% from one week earlier. The unadjusted Purchase Index decreased 8% compared with the previous week and was 7% higher than the same week one year ago.
“U.S. and China trade anxieties and protests in Hong Kong pulled U.S. Treasuries lower last week, and the 30-year fixed mortgage rate followed the same path, dipping below 4%,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Despite lower rates, mortgage applications decreased 2.2%, driven by an 8% slide in refinance activity. Rates have stayed in the same narrow range of around 4% since July, so we may be starting to see the expected slowdown in refinancing as the pool of eligible homeowners shrinks.”
Added Kan, “Purchase applications were 7% higher than a year ago, which adds another solid data point to the recent increases in new home sales and housing starts. There may be signs that housing inventory is starting to meaningfully rise, which will help with affordability and provide more choices for potential home buyers.”
The refinance share of mortgage activity decreased to 59.5% of total applications from 61.9% the previous week. The adjustable-rate mortgage share of activity decreased to 4.6% of total applications.
The FHA share of total applications decreased to 13.0% from 13.1% the week prior. The VA share of total applications increased to 12.9% from 12.7% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.99% from 4.03%, with points increasing to 0.33 from 0.31 (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 3.93% from 3.98%, with points increasing to 0.28 from 0.22 (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 3.80% from 3.85%, with points increasing to 0.32 from 0.28 (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 3.40% from 3.43%, with points increasing to 0.31 from 0.28 (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 3.51% from 3.40%, with points increasing to 0.23 from 0.17 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
