Federal housing programs and predatory lending still stand in the way of black homeownership.
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Mortgage applications fell by 2.5% on a seasonally-adjusted basis over the week ending February 1, 2019, according to the Mortgage Bankers Association (MBA)’s latest Weekly Mortgage Applications Survey. The previous week’s results include an adjustment for the Martin Luther King Jr. holiday.

On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application volume, rose by 12% from the previous week. The Refinance Index rose by 0.3% over the same period. The Purchase Index fell 5% on a seasonally adjusted basis, and rose 13% on an unadjusted basis.

The refinance share of mortgage activity fell to 41.6% of total applications, down from 42.0% the previous week. The adjustable-rate mortgage (ARM) share fell to 7.8% of applications. The FHA share remained unchanged t 10.5%, the VA share fell to 10.0% from 10.7%, and the USDA share rose to 0.5% from 0.4%.

“Mortgage rates for all loan types declined last week, with the 30-year fixed mortgage rate falling seven basis points to 4.69 percent – the lowest rate since April 2018,” says Joel Kan, associate vice president of industry surveys and forecasts at the Mortgage Bankers Association. “Despite more favorable borrowing costs, and after a three-week surge in activity, purchase applications have slowed over the past two weeks, and are now almost 2 percent lower than a year ago. However, moderating price gains and the strong job market, including evidence of faster wage growth, should help purchase growth going forward.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) fell to 4.69% from 4.76% the previous week. Points for 80% loan-to-value ratio (LTV) loans fell to 0.45 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 $484,350) fell to 4.50% from 4.60%. Points for 80% LTV loans rose to 0.28 from 0.24, 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 4.70% from 4.77%. Points for 80% LTV loans fell to 0.57 from 0.58, and the effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages fell to 4.11% from 4.16%. Points for 80% LTV loans rose to 0.47 from 0.46, and the effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs fell to 4.04% from 4.14%. Points for 80% LTV loans remains unchanged at 0.37, and the effective rate decreased from last week.