Mortgage applications decreased 6.4% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending February 14, 2020.
The Market Composite Index, a measure of mortgage loan application volume, decreased 6.4% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5% compared with the previous week. The Refinance Index decreased 8% from the previous week and was 165% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3% from one week earlier. The unadjusted Purchase Index increased 2% compared with the previous week and was 10% higher than the same week one year ago.
“Treasury yields moved slightly higher last week, despite uncertainty surrounding the economic impact from the spread of the coronavirus. The 30-year fixed mortgage increased five basis points to 3.77% as a result, causing refinance applications – driven by a 11% drop in applications for conventional refinances – to fall,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Even with an 8% decline, the refinance index was still at its third highest reading so far this year. Government refinance activity, which tends to lag movements in the conventional market, bucked the overall trend, as VA loan refinances jumped 23%.”
Added Kan, “Purchase applications fell 3% last week, as there continues to be some pullback after a strong January. Activity was still 10% higher than a year ago, but too few options – especially at the lower portion of the market – are slowing some would-be buyers.”
The refinance share of mortgage activity decreased to 63.2% of total applications from 65.5% the previous week. The adjustable-rate mortgage share of activity decreased to 5.4% of total applications.
The FHA share of total applications decreased to 9.5% from 9.7% the week prior. The VA share of total applications increased to 12.1% from 10.1% the week prior. The USDA share of total applications remained unchanged from 0.4% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.77% from 3.72%, with points remaining unchanged at 0.28 (including the origination fee) for 80% loan-to-value ratio loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.79% from 3.75%, with points increasing to 0.19 from 0.17 (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 increased to 3.86% from 3.84%, with points decreasing to 0.24 from 0.26 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.22% from 3.20%, with points decreasing to 0.26 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.23% from 3.21%, with points increasing to 0.21 from 0.13 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
