Mortgage applications fell by 4.0% on a seasonally-adjusted basis for the week ending November 2, 2018, reaching the lowest level since December 2014, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application, fell by 2% from the previous week. The Refinance Index fell 3% from the previous week. The seasonally-adjusted Purchase Index fell 5%, down to the lowest level since November 2016, while the unadjusted Index fell 1%.
The refinance share of mortgage activity fell to 39.1% of total applications, down from 39.4% the previous week. The adjustable-rate mortgage (ARM) share of activity rose to 7.8%. The FHA share fell to 10.1% from 10.3%, the VA share rose to 10.1% from 9.8%, and the USDA share remained unchanged from 0.7%.
“Rates increased slightly last week, as various job market indicators showed a bounce back in job gains and an acceleration in wage growth in October. The survey’s 30-year fixed-rate, at 5.15 percent, was the highest since April 2010,” says Joel Kan, MBA’s associate vice president of economic and industry forecasts. “Application activity decreased over the week for both purchase and refinance applications, with the overall market index down to its lowest level since December 2014. The purchase index declined to its lowest level since November 2016, but remained only slightly below the same week a year ago. It’s evident that housing inventory shortages continue to impact prospective homebuyers this fall.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) rose to 5.15% from 5.11%. Points for 80% loan to value ratio (LTV) loans rose to 0.51 from 0.50. (All 80% LTV loan reports include the origination fee.) The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) rose to 4.97% from 4.94%. Points fell to 0.27 from 0.28 for 80% LTV loans, and the effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose to 5.15% from 5.08%. Points for 80% LTV loans rose to 0.64 from 0.62, and the effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 4.55%. Points for 80% LTV loans also remained unchanged at 0.51, and the effective rate increased from last week.
The average contract interest rate for 5/1 ARMs rose to 4.36% from 4.33%. Points for 80% LTV loans fell to 0.35 from 0.42, and the effective rate remained unchanged from last week.
