Mortgage applications increased 1.5% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending February 21, 2020. This week’s results include an adjustment for the Washington Birthday (Presidents’ Day) Holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 1.5% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7% compared with the previous week. The Refinance Index decreased 1% from the previous week and was 152% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 6% from one week earlier. The unadjusted Purchase Index decreased 1% compared with the previous week and was 10% higher than the same week one year ago.
“Last week appears to have been the calm before the storm. Weaker readings on economic growth caused a slight drop in mortgage rates, bringing them back to their level two weeks ago, but applications overall moved 1.5% higher,” said Mike Fratantoni, MBA’s senior VP and chief economist. “Refinance applications for conventional loans dropped a bit, but FHA refinances increased more than 22%. Purchase volume remained strong, supported both by low rates and the increased pace of construction over the past few months. With housing supply at low levels, new inventory is a positive development for prospective home buyers.”
Added Fratantoni, “As fears regarding the coronavirus have increased, Treasury yields have dropped to record lows this week amid the ensuing financial market volatility. Next week’s results will show the impact this drop in Treasuries had on mortgage activity.”
The refinance share of mortgage activity decreased to 60.8% of total applications from 63.2% the previous week. The adjustable-rate mortgage share of activity decreased to 5.3% of total applications.
The FHA share of total applications increased to 10.5% from 9.5% the week prior. The VA share of total applications decreased to 11.8% from 12.1% the week prior. The USDA share of total applications increased to 0.5% 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) decreased to 3.73% from 3.77%, with points decreasing to 0.27 from 0.28 (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) decreased to 3.72% from 3.79%, with points increasing to 0.23 from 0.19 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.84% from 3.86%, with points increasing to 0.26 from 0.24 (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 3.18% from 3.22%, with points decreasing to 0.23 from 0.26 (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 3.21% from 3.23%, with points increasing to 0.28 from 0.21 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
