Purchase, refi applications both increased compared to a year ago

Mortgage applications for both purchase and refinance increased in the week ending November 2019.

The Mortgage Bankers Association’s Weekly Mortgage Applications Survey revealed an increase of 1.5% (seasonally adjusted) in its Composite Market Index compared to a week earlier. Unadjusted, the index was up 11% compared to a week earlier.

Both the unadjusted Purchase Index and the Refinance Index were up 4% week-over-week while the Purchase Index was down 1% a seasonally adjusted basis.

"Mortgage rates stayed below 4 percent for the second straight week and borrowers responded positively, with mortgage applications rising 1.5 percent on the back of increases in both refinance and purchase activity," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Refinances have been strong this month, but we are starting to see the average pace slow compared to the peak experienced in August through October."

Compared to the same week of 2018, the Purchase Index was up 55% (unadjusted) while the Refinance Index was 314% higher.

"The annual increase in refinance and purchase activity was even more prominent in this report because Thanksgiving was a week earlier last year,” added Kan. “However, with roughly five weeks of reporting data left in 2019, the mortgage market is on track for its best year for originations since 2007."

Share of activity

• The refinance share of mortgage activity increased to 62% from 59% a week earlier;
• The adjustable-rate mortgage (ARM) share of activity increased to 4.8% of total applications;
• The FHA share of total applications decreased to 11.7% from 13.0% the week prior;
• The VA share of total applications increased to 14.1% from 12.9% the week prior;
• The USDA share of total applications remained unchanged from 0.5% the week prior.

Average contract rate
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.97% from 3.99%, with points decreasing to 0.30 from 0.33 (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 3.87% from 3.93%, with points increasing to 0.29 from 0.28 (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 3.79% from 3.80%, with points decreasing to 0.23 from 0.32 (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 3.38% from 3.40%, with points decreasing to 0.27 from 0.31 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.42 percent from 3.51%, with points decreasing to 0.22 from 0.23 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.