Mortgage Apps On-Track for Best Year Since 2007

Joel Kan, Associate Vice President of Economic and Industry Forecasting for the Mortgage Bankers Association (MBA) says low rates are continuing to keep mortgage applications activity brisk.  "Mortgage rates stayed below 4 percent for the second straight week and borrowers responded positively, with mortgage applications rising 1.5 percent on the back of increases in both refinance and purchase activity," Kan said. "Refinances have been strong this month, but we are starting to see the average pace slow compared to the peak experienced in August through October." 

MBA's Market Composite Index, a measure of mortgage loan application volume, increased, as Kan said, 1.5 percent on a seasonally adjusted basis during the week ended November 22.  On an unadjusted basis, the Index increased 11 percent compared with the previous week. The Refinance Index increased 4 percent from the previous week and was 314 percent higher than the same week one year ago, a week shortened by the Thanksgiving holiday.  The share of applications which were for refinancing increased to 62.0 percent from 59.5 percent the previous week.

The seasonally adjusted Purchase Index was down 1 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 55 percent higher than the same week one year ago.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

Added Kan, "The annual increase in refinance and purchase activity was even more prominent in this report because Thanksgiving was a week earlier last year. However, with roughly five weeks of reporting data left in 2019, the mortgage market is on track for its best year for originations since 2007." 

The FHA share of total applications decreased to 11.7 percent from 13.0 percent the week prior and the VA share jumped from 12.9 percent to 14.1 percent.  USDA applications accounted for the same 0.5 percent share as the previous week.  

Average interest rates declined for all mortgage types on both a contract and an effective basis. The average rate for 30-year fixed-rate mortgages (FRM) with origination balances at or below the conforming limit of $484,350 decreased to 3.97 percent from 3.99 percent. Points dipped to 0.30 from  0.33.

Thirty-year jumbo FRM, loans with balances greater than $484,350, had an average rate of 3.87 percent, down from 3.93 percent the prior week.  Points increased to 0.29 from 0.28.

The rate for 30-year FRM  backed by the FHA ticked down 1 basis point to 3.79 percent.  Points fell to 0.23 from 0.32.

The average contract interest rate for 15-year FRM decreased to 3.38 percent from 3.40 percent, with points decreasing to 0.27 from 0.31.

The  rate for 5/1 adjustable rate mortgages (ARMs) averaged 3.42 percent with 0.22 point.  The previous week the rate was 3.51 percent with 0.23 point.  The ARM share of activity increased to 4.8 percent of total applications from 4.6 percent during the week ended November 15.

MBA's Weekly Mortgage Applications Survey been conducted since 1990 and covers over 75 percent of all U.S. retail residential 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.

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