Mortgage Applications Fall in Mortgage Banker's Association Survey

by Chicago Agent


With interest rates rising, the Mortgage Bankers Association reported that mortgage applications declined in its Weekly Mortgage Application Survey.

By Carlo Calma, Peter Ricci

On account of rising mortgage interest rates, mortgage applications fell 7.4 percent for the week ending August 17, according to the latest Weekly Mortgage Application Survey from the Mortgage Banker’s Association (MBA).

And indeed, rates were up across the board, particularly for 30-year FRM with conforming loan balances, which increased from 3.76 percent to 3.86 percent.

Mortgage Applications, Mortgage Refinancings and Investors

In addition, MBA released three other indexes in its survey, along with an exhaustive list of the various mortgages rates and their respective increases:

  • The Market Composite Index, which measures mortgage loan application volume, fell 7.4 percent on a seasonally adjusted basis and 8.0 percent on an unadjusted basis.
  • The Refinance Index fell 9 percent to its lowest level since early July.
  • And the Purchase Index, when seasonally adjusted, fell 0.9 percent, with the unadjusted also declining 0.9 percent (though it was 3.0 percent higher than last year).
  • The refinancing share of mortgage activity was largely unchanged, falling from 81.0 percent to 80.0 percent, with HARP’s share of that activity maintaining its 24 percent level and ARM refinancings increasing to 4.0 percent.
  • The investor share of applications rose ever so slightly from 5.5 percent in June to 5.7 percent in July, but that increase was fueled in large part by an 8.7 percent spike in the Pacific region, where investors are buying up large amounts of distressed properties.

Mortgage Interest Rates Increase

As stated earlier, rates in the Weekly Mortgage Application Survey were uniformly up, including:

  • The contract interest rate for jumbo 30-year FRM increased from 4.03 percent to 4.11 percent.
  • FHA 30-year FRM rates increased from 3.53 percent to 3.62 percent.
  • For 15-year FRM, the increases were slight, rising 3 bps to 3.15 percent, and the five and one-year ARMs were even slighter, increasing just a single bps to 2.74 percent.

As any real estate professional knows, mortgage interest rates are highly dependent on economic trends, and news on the economy has been relatively positive as of late; however, could budgetary uncertainties push rates down, as was the case last fall?

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