Mortgage Applications Increase
Mortgage applications increased 0.5% from one week earlier, although interest rate instability affected consumers’ ability to get the best price for their loan, according to the Mortgage Bankers Association.
“The ongoing interest rate volatility is impacting a borrower’s ability to lock in the lowest rate possible,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a press release.
“Purchase applications slowed for the second week in a row. While near-term economic uncertainty is still a factor, other fundamental issues, such as a lack of housing inventory in many markets, is preventing purchase activity from meaningfully rising. However, purchase applications were still much higher than a year ago. This is a reminder that the purchase environment in 2019 continues to be stronger than in 2018.”
The MBA’s Weekly Mortgage Applications Survey for the week ending Oct. 11 found that the refinance index increased 4% from the previous week and was 199% higher than the same week one year ago. The refinance share of mortgage activity increased to 62.2% of total applications from 60.4% the previous week.
Meanwhile, the seasonally adjusted purchase index decreased 4% from one week earlier. The unadjusted purchase index decreased 4% compared with the previous week and was 12% higher than the same week one year ago.
Adjustable-rate mortgage share of activity increased to 5.5% from 5.3% of total applications and the share of Federal Housing Administration-insured loan applications increased to 11.3% from 10.3% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 12.9% from 12.3% and the U.S. Department of Agriculture/Rural Development share decreased to 0.4% from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased 2 basis points to 3.92%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate remained unchanged at 3.9%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 2 basis points to 3.77%. For 15-year fixed-rate mortgages, the average decreased 3 basis points to 3.32%. The average contract interest rate for 5/1 ARMs increased to 3.37% from 3.25%.
Posted on nationalmortgagenews.com on 10/16/19.