Overall mortgage applications decrease
Applications for mortgages fell last week amid stronger homebuilding activity, according to the Mortgage Bankers Association.
MBA's market composite index dropped 5.3% on a seasonally adjusted basis and 6% on an unadjusted basis from the week prior.
Refinances also decreased by 5% but was 128% higher than the same week a year ago. The seasonally adjusted purchase index went down 5% and 7% on an unadjusted basis.
"The 10-Year Treasury yield increased last week amid signs of stronger homebuilding activity and solid consumer spending, leading to a rise in conventional conforming and jumbo 30-year mortgage rates to just under 4%. With this increase, conventional refinance application volume fell 11%," said Mike Fratantoni, MBA senior vice president and chief economist. "Refinance applications for government loans did increase, even though rates on FHA loans picked up. The change in the mix of business has kept the average refinance loan size smaller than we had seen earlier this year."
The refinance share of mortgage activity rose slightly to 62.6% of total applications from 62.2% the previous week.
The adjustable-rate mortgage share of activity made up 4.1% of total applications. Additionally, the FHA and VA shares of total applications grew to 14.5% and 15.2%, respectively, while the USDA share held steady at 0.5%.
"We are in the slowest time of the year for the purchase market," Fratantoni said. "Purchase application activity declined after the seasonal adjustment, but still remains about 5% ahead of last year's pace. The increase in construction activity will bolster housing inventories, which should be a positive for purchase volumes going into 2020."
