Tags: mortgage | applications | home loan | demand

Mortgage Applications Fall for 2nd Week

Mortgage Applications Fall for 2nd Week
(Dave Bredeson/Dreamstime)

Wednesday, 21 October 2020 03:18 PM

Mortgage applications fell slightly last week in the second straight weekly drop as mortgage rates inched higher, according to data from the Mortgage Bankers Association.

Mortgage applications decreased 0.6 percent, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index increased 0.2 percent from the previous week and was 74 percent higher than the same week one year ago.

The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 26 percent higher than the same week one year ago.

"Mortgage rates increased last week, with the 30-year fixed rate climbing 2 basis points to 3.02 percent - the highest since late September. Despite the uptick in rates, refinance activity held steady, with FHA refinance applications posting a 17.6 percent increase, helping to offset declines in the other loan types," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.

"Homebuyer demand remains strong this fall, but purchase applications did decrease 2 percent, with both conventional and government purchase activity taking a step back. Given the ongoing housing market recovery and low rate environment, both purchase and refinance applications remained robust compared to a year ago, rising 26 percent and 74 percent, respectively," Kan said.

The refinance share of mortgage activity increased to 66.1 percent of total applications from 65.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 1.9 percent of total applications.

The FHA share of total applications increased to 11.8 percent from 10.7 percent the week prior. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.02 percent from 3.00 percent, with points increasing to 0.36 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) 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 3.33 percent from 3.30 percent.

The average contract interest rate for 15-year fixed-rate mortgages increased to 2.61 percent from 2.59 percent.

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Mortgage applications fell slightly last week from the previous week in the second straight weekly drop as mortgage rates inched higher, according to data from the Mortgage Bankers Association.
mortgage, applications, home loan, demand
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2020-18-21
Wednesday, 21 October 2020 03:18 PM
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