Mortgage applications rose by 1.5% on a seasonally-adjusted basis from one week earlier for the week ending May 31st, 2019, according to the Mortgage Bankers’ Association’s Weekly Mortgage Applications Survey. This week’s results included an adjustment for the Memorial Day holiday.
“Mortgage rates dropped to their lowest level since the first week of 2018, driven by increasing concerns regarding the ongoing trade tensions with China and Mexico,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Some borrowers, particularly those with larger loans, jumped on the opportunity to refinance, bringing the index and average refinance loan size to their highest levels since early April. Additionally, refinances for FHA and VA loans jumped by 11 percent.”
On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application volume, fell by 10% from the previous week. The Refinance Index rose by 6% over the same period. The seasonally-adjusted Purchase Index fell 2%, while the unadjusted Index fell 14%.
“Coming out of the Memorial Day holiday, and likely impacted by the financial market volatility caused by the trade tensions, purchase application volume declined for the week. Potential home buyers may be more cautious given the heightened economic uncertainty,” Fratantoni said.
The refinance share of mortgage activity rose to 42.2% of applications, up from 39.7% the previous week. The adjustable-rate mortgage (ARM) share rose to 7.1% of applications. The FHA share fell to 9.5% from 9.6%, the VA share rose to 11.3% from 11.2%, and the USDA share fell to 0.6% from 0.7%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) fell to 4.23% from 4.33% the previous week. Points for 80% loan-to-value ratio (LTV) loans fell to 0.33 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 4.09% from 4.18%. Points for 80% LTV loans fell to 0.21 from 0.23, 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 4.24% from 4.33%. Points for 80% LTV loans fell to 0.33 from 0.43, and the effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages fell to 3.65% from 3.73%. Points for 80% LTV loans fell to 0.36 from 0.40, and the effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs fell to 3.62% from 3.74%. Points for 80% LTV loans fell to 0.19 from 0.34, and the effective rate decreased from last week.
