This story was originally published in Builder.
Mortgage applications fell by 7.1% on a seasonally-adjusted basis from one week earlier for the week ending October 12th, 2018, according to the Mortgage Bankers Association (MBA)’s Weekly Mortgage Applications Survey. This week’s results do not include an adjustment for the Columbus Day holiday.
On an unadjusted basis, the Market Composite Index fell 7% from the previous week. The Refinance index fell by 9% over the same period, and both the seasonally adjusted and unadjusted Purchase Index fell by 6%.
The refinance share of mortgage activity fell to 38.1% of total applications, down from 39.0% the previous week. The adjustable-rate mortgage (ARM) share of activity fell to 7.1% of applications. The FHA share fell to 10.4% from 10.5%, the VA share rose to 10.4% from 10.0%, and the USDA share of total applications remained unchanged at 0.8%.
"Mortgage applications were likely impacted by both the Columbus Day holiday and the increase in rates, as we saw declines in both purchase and refinance activity. However, it's important to note that purchase activity remained 2.5 percent higher than a year ago, which is in line with our forecast for gradual gains in purchase activity this year," says Joel Kan, MBA Associate Vice President of Industry Surveys and Forecasts. ‘"Treasury rates increased over the week, mainly as communication from Federal Reserve officials pointed to a continued path of rate hikes, based on the strength of the economy and hot job market. This pushed the 30-year fixed-rate mortgage past the 5 percent mark, increasing 5 basis points to 5.10 percent. Furthermore, four out of the five rates tracked in our survey increased."
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) rose to its highest level since February 2011 at 5.10%, up from 5.05% the previous week. Points for 80% loan-to-value ratio (LTV) loans rose to 0.55 from 0.51. (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) fell to 4.98% from 4.99%. Points for 80% LTV loans fell to 0.34 from 0.35, and the effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose to its highest level since April 2011 at 4.99%, up from 4.98%. Points for 80% LTV loans rose to 0.69 from 0.63, and the effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages rose to its highest level since February 2011 at 4.50%, up from 4.44%. Points for 80% LTV loans fell to 0.54 from 0.58, and the effective rate increased from last week.
The average contract interest rate for 5/1 ARMs rose to its highest level since the start of the survey in 2011 at 4.34%, up from 4.29%, a previous high. Points for 80% LTV loans fell to 0.35 from 0.52, and the effective rate decreased from last week.
This story was originally published in Builder.
