The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey gained 5.3% for the week ending August 2. The jump in the survey followed a drop in interest rates and a surge in refinance applications.
Purchase Index fell 2% from the week ending July 26.
| Indicator | July 26 | August 2 |
| Composite Index – W/W∆ | -1.4% | 5.3% |
| Purchase Index – W/W ∆ | -3.0% | -2.0% |
| Refinance Index – W/W ∆ | 0.1% | 12.0% |
“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,” Mike Fratantoni, MBA Senior Vice President and Chief Economist, said. “The result was a sharp drop in mortgage rates, which will likely draw many refinance borrowers into the market in the coming weeks.”
The 30-year fixed rate mortgage fell to its lowest level since November 2016, fueling a nearly 12% gain in refinance applications. The Refinance Index now sits at over 2,000, the highest level for the same time period and 116% higher than the same week one year ago.
“We fully expect that refinance volume will jump even higher this week given the further drop in rates,” Mr. Fratantoni added.
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 of activity was unchanged at 4.7%.
The FHA share of total applications decreased to 11.0 percent from 11.3 percent the week prior. The VA share of total applications increased to 12.8 percent from 12.6 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.01 percent from 4.08 percent, with points increasing to 0.37 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. 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) decreased to 3.96 percent from 4.04 percent, with points increasing to 0.26 from 0.22 (including the origination fee) for 80 percent 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 3.86 percent from 3.94 percent, with points increasing to 0.38 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.37 percent from 3.48 percent, with points increasing to 0.37 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 3.36 percent from 3.52 percent, with points increasing to 0.36 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
Mortgage Bankers Association (MBA) Press Release
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
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