Mortgage applications increased 3.8% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending December 6, 2019. The results for the week ending November 29, 2019 included an adjustment for the Thanksgiving holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 3.8 % on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 47% compared with the previous week. The Refinance Index increased 9% from the previous week and was 146% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 0.4% from one week earlier. The unadjusted Purchase Index increased 35% compared with the previous week and was 5% higher than the same week one year ago.
“Low mortgage rates continue to be the trend as 2019 comes to an end, and mortgage applications responded accordingly last week, rising 3.8%. The 30-year fixed mortgage rate remained under 4% for the fourth straight week, and rates for FHA loans declined close to their lowest level of the year. The decrease in FHA rates led to a 27% jump in refinance applications for those loans, and their share of refinance activity – at 14% – was the highest since 2016,” said Joel Kan, MBA’s associate VP of economic and industry forecasting. “Purchase applications were down slightly, but were 5% higher than a year ago, which is in line with the gradual growth in the purchase market seen throughout this year.”
Added Kan, “The November jobs data showed increased payroll gains and low unemployment, which means conditions remain favorable for steady purchase growth in the coming months.”
The refinance share of mortgage activity increased to 62.4% of total applications from 59% the previous week. The adjustable-rate mortgage share of activity increased to 5% of total applications.
The FHA share of total applications increased to 13.9% from 12% the week prior. The VA share of total applications decreased to 12.4% from 12.7% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 3.98% from 3.97%, with points increasing to 0.33 from 0.32 (including the origination fee) for 80% 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 $484,350) decreased to 3.90% from 3.91%, with points increasing to 0.27 from 0.26 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.79% from 3.83%, with points decreasing to 0.27 from 0.31 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.37%, with points increasing to 0.30 from 0.28 (including the origination fee) for 80% LTV loans. The effective rate remained unchanged from last week.
The average contract interest rate for 5/1 ARMs increased to 3.52% from 3.28%, with points decreasing to 0.24 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
