Refinance and purchase applications both posted solid results
There was an increase in mortgage applications last week as both purchasers and refinancers enjoyed lower rates.
The Mortgage Bankers Association’s Market Composite Index, compiled from its Weekly Mortgage Applications Survey, shows that overall activity edged up 2% week-over-week on an adjusted basis, including adjustment for the Labor Day holiday.
The Refinance Index was up 0.4% while the Purchase Index gained 5%. Unadjusted, the Purchase Index was down 8% week-over-week but was 9% higher than a year ago.
"Mortgages rates continued to decline over the holiday-shortened week, with the 30-year fixed rate decreasing five basis points and remaining near three-year lows," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Refinances were essentially unchanged, up just 0.4% but August overall was the strongest month of activity so far in 2019. Purchase applications rose around 5%, with increases for both conventional and government applications."
Share of activity
- The refinance share of mortgage activity decreased to 60.0% of total applications from 60.4% the previous week;
- The adjustable-rate mortgage (ARM) share of activity decreased to 5.6% of total applications;
- The FHA share of total applications decreased to 9.3% from 10.2% the week prior;
- The VA share of total applications increased to 11.9% from 11.3% the week prior;
- The USDA share of total applications decreased to 0.5% from 0.6% the week prior;
Average contract rates
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.82 percent from 3.87 percent, with points increasing to 0.44 from 0.34 (including the origination fee) for 80 percent 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 3.84 percent from 3.94 percent, with points increasing to 0.34 from 0.24 (including the origination fee) for 80 percent 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 3.76 percent from 3.80 percent, with points decreasing to 0.31 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.28 percent from 3.29 percent, with points increasing to 0.47 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.42 percent from 3.40 percent, with points increasing to 0.48 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
