The volume of mortgage applications increased last week for the first time since early September. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, rose 3.6% on a seasonally adjusted basis during the week ended October 13. It did decline 7% on an unadjusted basis from the week ended October 6, a week was shortened by the Columbus Day holiday. The week’s results included an adjustment to account for that event.
The increase in the Composite Index was the result of gains in both refinance and purchase mortgage applications. The seasonally adjusted Purchase Index was up 4% compared to the previous week although the unadjusted version fell 6%. The Purchase Index was 9% higher than during the same week in 2016.
Refinancing also gained ground, ending a four-week slide. That index rose 3% although the share of total applications that were for refinancing ticked down to 48.6% from 49.0%.
FHA mortgage applications made up 10.4% of the total, compared to 10.3% the prior week, while the VA share ticked down to 10.5% from 10.6%. USDA loans applications increased their share from 0.7% to 0.8%.
Mortgage interest rates showed little movement from the previous week. The direction of both contract and effective rates was mixed.
The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $424,100 or less decreased to 4.14% from 4.16%. Points were unchanged at 0.44 and the effective rate declined.
Rates for the 30-year FRM with jumbo loan balances greater than $424,100 ticked up 2 basis points to 4.13%. Points increased to 0.32 from 0.31 and the effective rate was up.
The contract interest rate for 30-year FRM backed by the FHA was unchanged from the prior week at 4.00%. Although points increased from 0.36 to 0.37 the effective rate also was unchanged.
Fifteen-year FRM had an average rate of 3.45% with 0.43 point. The previous week the rate was 3.44% with 0.36 point. The effective rate was also higher than a week earlier.
The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 3.31% from 3.33%. Points decreased to 0.40 from 0.43, drawing the effective rate lower. ARM applications made up 6.1% of all those received, down from 6.6% a week earlier.
MBA’s Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75% of all U.S. retail residential mortgage applications. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80% loan-to-value ratio and points that include the origination fee.