MBA: Mortgage applications continue to fall as borrowers become less sensitive to lower rates

The Market Composite Index slides 2.4% from last week

Mortgage applications declined 2.4% from last week, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 5, 2018.

The MBA pointed out that last week included an adjustment for the Fourth of July holiday. On an unadjusted basis, the index decreased a whopping 22% from last week.

“Mortgage applications were down slightly, even after adjusting for the July 4th holiday, as we saw opposing moves in purchase and refinance applications over the week,” MBA Vice President of Economic and Industry Forecasting Joel Kan said. “Purchase applications increased from the previous week and were up 5% from a year ago, a continuation of the strong annual growth that we saw in the first half of 2019.”

The Refinance index declined 7% from the previous week and the unadjusted Purchase Index retreated 18% from a week ago but remained 6% higher than the same week in 2018. Lastly, the seasonally adjusted Purchase Index ticked up 2% from the week before.

“Refinance activity decreased over 6% and the refinance share of applications fell back below 50%, even as the 30-year, fixed-rate declined three basis points to 4.04%," Kan said. "Borrowers have been less sensitive to low rates as many borrowers have either recently refinanced or are likely waiting for rates to fall even further. Other mortgage rates in our survey were unchanged or slightly higher than in the previous week.”

Here's a more detailed breakdown of this week's mortgage application data:

  • The refinance share of mortgage activity fell to 48.7% from last week’s 51%.
  • The adjustable-rate mortgage share of activity rose to 5.3% of total applications.
  • The Federal Housing Administration's share of mortgage apps held its ground from last week’s 10.1%.
  • The Department of Veterans Affairs' share of applications moved forward to 13.2% from last week’s 12.8%.
  • The Department of Agriculture's share of total applications increased from last week’s 0.6% to 0.7%.
  • Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) crawled backward from last week’s rate of 4.07% to 4.04%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) slight increased to 4.03% from last week’s 4%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA held its ground from last week’s 3.97%.
  • The average contract interest rate for 15-year fixed-rate mortgages did not budge from last week’s 3.42%.
  • The average contract interest rate for 5/1 ARMs increased to 3.56% from last week’s 3.46%.


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