Mortgage Apps Decline

Application volumes fell even as interest rates were in a holding pattern during the week ended September 25.  The Mortgage Bankers Association (MBA) said that mortgage applications as measured by its Market Composite Index decreased during the week by 6.7 percent on a seasonally adjusted basis and 7 percent unadjusted.

The Refinance Index was down 8 percent from the week ended September 18 and the refinancing share of all applications fell slightly from 58.4 percent to 58.0 percent.  Both seasonally adjusted and unadjusted Purchase Indices were down 6.0 percent but the unadjusted index remained 20 percent higher than during the same week in 2014.

Refinance Index vs 30 Yr Fixed

Purchase Index vs 30 Yr Fixed

The FHA share of total applications was up a slight 0.9 percentage point to 13.8 percent and the VA share of total applications rose to 10.3 percent from 10.0 percent. The USDA share of total applications was unchanged from 0.7 percent.

There were only marginal changes in average mortgage interest rates over the week. The contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) averaged 4.08 percent, a dip from 4.09 percent the previous week, with points remaining unchanged at 0.45.  The effective rate declined.  

The rate for 30-year FRM with jumbo loan balances over $417,000 had a largest change of any loan type, a descent of three basis points to 3.96 percent.  Points decreased to 0.35 from 0.36 and the effective rate was down.

The average contract interest rate for FHA-backed 30-year FRM decreased a single basis point to 3.87.  Points increased to 0.34 from 0.33 and the effective rate remained the same as the previous week.

The rate for 15-year FRM slipped to 3.29 percent from 3.31 percent.  Points were 0.41 compared to 0.42 the prior week and the effective rate was down.

Adjustable-rate mortgages (ARMs) had the same 6.9 percent share of total applications as during the previous week and the average contract interest rate for 5/1 ARMs was also unchanged at 2.95 percent.  Points dropped from 0.58 to 0.41 resulting in a lower effective rate.

MBA's Weekly Mortgage Applications Survey, which has been conducted since 1990, covers over 75 percent of all U.S. retail residential mortgage applications. Survey respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on a mortgage with an 80 percent loan-to-value ratio and points that include an origination fee.