US mortgage applications saw a weekly decrease of 6.5% on the week ending 21 August 2020, according to the latest Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.
The Market Composite Index, which is a measure of mortgage loan application volume, decreased 6.5% 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 10% from the previous week however was 34% higher than the same week in 2019. one year ago. The seasonally adjusted Purchase Index saw a weekly increase of 0.4%. The unadjusted Purchase Index decreased 2% compared with the previous week but was 33% higher than the same week the previous year.
Joel Kan, associate vice-president of economic and industry forecasting at the MBA, said: “Mortgage rates were mixed last week, but the rates for 30-year fixed mortgages and 15-year fixed mortgages declined. Despite the lower rates, conventional refinance applications fell 11% and government refinance applications fell 6%, which pushed the total refinance index to its lowest weekly level since July.
“The home purchase market remains a bright spot for the overall economy. Purchase applications were essentially unchanged but were 33% higher than a year ago – the 14th straight week of year-over-year gains. Mortgage rates at record lows and households looking for more space are driving this summer’s surge in demand.”
The refinance share of mortgage activity decreased to 62.6% of total applications from 64.6% the previous week according to the data. The adjustable-rate mortgage (ARM) share of activity decreased to 2.6% of total applications.
The FHA share of total applications increased by 0.2% to 10.5% from the week prior. The VA share of total applications increased to 11.8% from 11.2%, whilst the USDA share of total applications remained unchanged at 0.6%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $510,400 or less, decreased to 3.11% from 3.13%, with points increasing to 0.38 from 0.36 – including the origination fee – for 80% LTV loans. The average contract interest rate for 30-year fixed rate mortgages with jumbo loan balances, or those balances greater than $510,400, remained unchanged at 3.41%. Points also remained unchanged at 0.35, including the origination fee, for 80% LTV loans.
The average contract interest rate for 30-year fixed rate mortgages backed by the FHA remained unchanged from 3.16%. Points increased to 0.29 from 0.27, including the origination fee, for 80% LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.70% from 2.73%, with points increasing to 0.39 from 0.36 – including the origination fee – for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.14% from 2.95% according to the data, with points increasing to 0.42 from 0.41 – including the origination fee – for 80% LTV loans. The effective rate increased from last week.
This post has originally been featured in Property Wire.