Mortgage applications rose 5.3% from last week, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 2, 2019.
This means on an unadjusted basis, the index climbed 5.3% from the previous week.
“The Federal Reserve cut rates as expected last week, but the bigger influence on the financial markets was the beginning of a trade war with China,” MBA Senior Vice President and Chief Economist Mike Fratantoni said. “The result was a sharp drop in mortgage rates, which will likely draw many refinance borrowers into the market in the coming weeks.”
The Refinance Index moved forward 12% from the previous week and was a whopping 116% higher than the same time period in 2018. The unadjusted Purchase Index fell 2% from a week ago but remained 7% higher than the same week a year ago. The seasonally adjusted Purchase Index fell 2% from the week before.
“The 30-year fixed rate mortgage fell to its lowest level since November 2016, and the drop resulted in an almost 12% increase in refinance application volume, bringing the index to a reading over 2,000 – its highest over the same time period,” Fratantoni siad. “We fully expect that refinance volume will jump even higher this week given the further drop in rates.”
Here's a more detailed breakdown of this week's mortgage application data:
- The refinance share of mortgage activity increased to 53.9% from last week’s 50.5%.
- The adjustable-rate mortgage share of activity remained unchanged from 4.7% of total applications.
- The Federal Housing Administration's share of mortgage apps retreated to 11% from last week’s 11.3%.
- The Department of Veterans Affairs' share of applications moved forward to 12.8% from last week’s 12.6%.
- 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) decreased from last week’s rate of 4.08 to 4.01%.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) fell to 3.96% from last week’s 4.04%.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA declined to 3.86% from last week’s 3.94%.
- The average contract interest rate for 15-year fixed-rate mortgages declined from last week’s 3.48 to 3.37%.
- The average contract interest rate for 5/1 ARMs slightly decreased to 3.36% from last week’s 3.52%.