Mortgage applications rose by 5.3% on a seasonally-adjusted basis for the week ending August 2nd, 2019, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application volume, rose 5% from the previous week. The Refinance Index rose 12% over the same period, and both the seasonally-adjusted and the unadjusted Purchase Index fell 2%.
The refinance share of mortgage activity rose to 53.9% of total applications, up from 50.5% the previous week. The adjustable-rate mortgage (ARM) share remained unchanged at 4.7%. The FHA share fell to 11.0% from 11.3%, the VA share rose to 12.8% from 12.6%, and the USDA share remained unchanged at 0.6%.
“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,” says Mike Fratantoni, MBA’s 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% 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.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) fell to 4.01% from 4.08% the previous week. Points for 80% loan-to-value ratio (LTV) loans rose to 0.37 from 0.34. (All 80% LTV loan reports include the origination fee.) The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) fell to 3.96% from 4.04%. Points for 80% LTV loans rose to 0.26 from 0.22, and the effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 3.86% from 3.94%. Points for 80% LTV loans rose to 0.38 from 0.29, and the effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages fell to 3.37% from 3.48%. Points for 80% LTV loans rose to 0.37 from 0.26, and the effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs fell to 3.36% from 3.52%. Points for 80% LTV loans rose to 0.36 from 0.31, and the effective rate decreased from last week.
