MBA: Mortgage applications fall for the third consecutive week, reaching a 4-month low

Market Composite Index falls 1% from last week

Mortgage applications fell 1.4% from last week, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 26, 2019.

This means on an unadjusted basis, the index slid 1% from the previous week.

MBA Vice President of Economic and Industry Forecasting Joel Kan said mortgage applications were lower last week, driven by a 3% decrease in purchase applications.

“While purchase activity was still up 6% from a year ago, the index has now decreased for three straight weeks and reached its lowest point since March. Despite healthy demand, inadequate supply levels continue to hold back some would-be buyers,” Kan said. “Rate movements were mixed, with the 30-year fixed rate remaining

unchanged (at 4.08%) but the FHA rate decreasing to its lowest level since 2017 to 3.94%.”

The Refinance Index rose 0.1% from the previous week and was a striking 84% higher than the same time period in 2018. The unadjusted Purchase Index fell 3% from a week ago but remained 6% higher than the same week a year ago. The seasonally adjusted Purchase Index slid 3% from the week before.

“Refinance applications were essentially flat, but the components told different stories,” Kan said. “Conventional refinances were up 1.1%, but government refinances were down almost 3% –led by a drop in VA applications.”

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

  • The refinance share of mortgage activity increased to 50.5% from last week’s 49.8%.
  • The adjustable-rate mortgage share of activity remained unchanged from 4.7% of total applications.
  • The Federal Housing Administration's share of mortgage apps stayed at last week’s 11.3%.
  • The Department of Veterans Affairs' share of applications moved backward to 12.6% from last week’s 13.1%.
  • The Department of Agriculture's share of total applications held steady from last week’s 0.6%.
  • Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) did not budge from last week’s rate of 4.08%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) held its ground from last week’s 4.04%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA declined to its lowest level since September 201, falling from last week’s 3.98% to 3.94%.
  • The average contract interest rate for 15-year fixed-rate mortgages rose from last week’s 3.45 to 3.48%.
  • The average contract interest rate for 5/1 ARMs slightly decreased to 3.52% from last week’s 3.56%.

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