Mortgage applications decreased 1.2% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending January 17, 2020.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.4% compared with the previous week. The Refinance Index decreased 2% from the previous week and was 116% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 2% from one week earlier. The unadjusted Purchase Index increased 4% compared with the previous week and was 8% higher than the same week one year ago.
“Mortgage applications dipped slightly last week after two weeks of healthy increases, but even with a slight decline, the total pace of applications remains at an elevated level. The purchase market has started 2020 on a strong note, running 8% higher than the same week a year ago,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Refinance applications remained near the highest level since October 2019, as the 30-year fixed rate was unchanged at 3.87%, while the 15-year fixed rate decreased to its lowest level since November 2016. Even with more positive developments surrounding the U.S. and China trade negotiations and healthy retail sales data, investors seemed cautious and maintained their demand for safer U.S. Treasuries, which kept yields lower. Our expectation is that rates will stay along this same narrow range.”
The refinance share of mortgage activity decreased to 61.6% of total applications from 62.9% the previous week. The adjustable-rate mortgage share of activity increased to 4.6% of total applications.
The FHA share of total applications decreased to 11.3% from 12.7% the week prior. The VA share of total applications increased to 13.8% from 12.1% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) remained unchanged at 3.87%, with points decreasing to 0.27 from 0.32 (including the origination fee) for 80% loan-to-value ratio loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.87% from 3.83%, with points decreasing to 0.21 from 0.24 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.78%, with points decreasing to 0.25 from 0.30 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to the lowest level since November 2016, 3.25%, from 3.30%, with points decreasing to 0.22 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 3.29% from 3.35%, with points increasing to 0.25 from 0.11 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
