Last week's decline in mortgage rates drives uptick in applications
Mortgage applications took a turn for the better this week, reversing course from last week’s decline.
The Mortgage Bankers Association indicates mortgage applications increased by 1.5% from the previous week, which saw a 6.4% decrease.
“Last week appears to have been the calm before the storm,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Weaker readings on economic growth caused a slight drop in mortgage rates, bringing them back to their level two weeks ago, but applications overall moved 1.5% higher.”
Although refinance applications for conventional loans slightly dropped this week, Fratantoni indicates FHA refinances increased by more than 22%.
The MBA reports the Refinance Index decreased only 1% from the previous week, remaining 152% higher than the same week one year ago.
However, the refinance share of mortgage activity decreased to 60.8% of total applications, falling from 63.2% the previous week, the MBA said.
When it comes to purchase volume, Fratantoni said the index remains strong, supported both by low rates and the increased pace of construction over the past few months.
According to the MBA, the seasonally adjusted Purchase Index rose 6% this week, while the unadjusted purchase index fell 1% from last week. Nevertheless, activity is still 10% higher than a year ago.
Here is a more detailed breakdown of this week’s mortgage application data:
The adjustable-rate mortgage share of activity decreased to 5.3% of total applications.The Federal Housing Administration share of mortgage apps rose to 10.5% from 9.5% last week.The Department of Veterans Affairs share of applications fell to 11.8% from 12.1% the previous week.The Department of Agriculture share of total applications moved forward to 0.5% from the prior week’s 0.4%.Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.73% from last week’s 3.77%.The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) retreated to 3.72% from 3.79% one week before.The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.84% from last week’s 3.86%.The average contract interest rate for 15-year fixed-rate mortgages fell to 3.18% from last week’s 3.22%.The average contract interest rate for 5/1 ARMs slid to 3.22% from last week’s 3.23%.
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