Purchases Reclaimed Market Share From Refis Last Week

This month's half-hearted rally in refinancing didn't last long. During the week that ended November 10, applications for refinancing made up more than half of all mortgage applications received, the first time that had happened since late September, and refinancing volume jumped 6 percent.  Last week refinancing ebbed, but purchase mortgage applications did manage to fill the resulting gap.

The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of total mortgage application volume, was higher than the previous week. The seasonally adjusted index eked out an 0.1 percent gain, although the non-adjusted index was down 2.0 percent.

The Refinance Index lost 5.0 percent while the seasonally adjusted Purchase Index increased 5 percent. The unadjusted Purchase Index rose 1.0 percent from the previous week and was 4.0 percent higher than during the same week in 2016. The share of applications that were for refinancing decreased from 51.3 percent to 49.9 percent.

The share of applications that were for FHA backed loans increased to 10.6 percent from 10.2 percent and the VA share increased 0.6 percentage points to 10.7 percent.  Applications for USDA loans accounted for 0.7 percent of the total, the same share as the previous week.   

Both contract and effective rates rose for all fixed-rate loan types. Adjustable rates however, were down.

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $424,100 or less increased to 4.20 percent with 0.42 point. The rate the prior week was 4.18 percent, with points 0.40 point.  The jumbo version of the 30-year FRM, loans with balances higher than the conforming limit, had an increase of 4 basis points in its average contract rate to 4.16 percent. Points rose to 0.30 from 0.26.

FHA-backed 30-year FRM rose to its highest contract rate since last July, 4.08 percent with 0.42 point.  The prior week the rate was 4.05 percent with 0.40 point.

The rate for 15-year FRM was 3.56 percent, up from 3.54 percent a week earlier. It was the highest rate for that product since March, Points decreased to 0.42 from 0.43.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 3.31 percent from 3.41 percent. Points rose to 0.38 from 0.37 and the effective rate declined. The ARM share of activity ticked up to 6.5 percent of total applications from 6.4 percent.

MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential mortgage applications.  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 loans with an 80 percent loan-to-value ratio and points that include the origination fee.