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Mortgage Applications Jump 5.3% After Rate Cut

Mortgage Applications Jump 5.3% After Rate Cut
(Dreamstime/FLYNT)

By    |   Wednesday, 07 August 2019 02:42 PM

Mortgage applications increased 5.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 2, 2019.

The Market Composite Index, a measure of mortgage loan application volume, increased 5.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5 percent compared with the previous week.

The Refinance Index increased 12 percent from the previous week and was 116 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 7 percent higher than the same week one year ago.

"The Federal Reserve cut rates as expected last week, but the bigger influence on the financial markets was the beginning of a trade war with China. The result was a sharp drop in mortgage rates, which will likely draw many refinance borrowers into the market in the coming weeks," said Mike Fratantoni, MBA Senior Vice President and Chief Economist.

"The 30-year fixed rate mortgage fell to its lowest level since November 2016, and the drop resulted in an almost 12 percent increase in refinance application volume, bringing the index to a reading over 2,000 - its highest over the same time period. We fully expect that refinance volume will jump even higher this week given the further drop in rates."

Added Fratantoni, "Lower mortgage rates did not pull more homebuyers into the market, as purchase volume slipped a bit last week, but still remains around 7 percent ahead of last year's pace."

The refinance share of mortgage activity increased to 53.9 percent of total applications from 50.5 percent the previous week. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.01 percent from 4.08 percent.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.37 percent from 3.48 percent.

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Mortgage applications increased 5.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 2, 2019.
mortgage, applications, rate, cut
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2019-42-07
Wednesday, 07 August 2019 02:42 PM
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