Although the weekly volume of applications for mortgage refinances retreated, purchase financing applications more than offset the decline.
On a seasonally adjusted basis, the Market Composite Index for the week ended Nov. 18 ascended 6 percent versus the prior week.
Without any seasonal adjustments, the index, a measure of mortgage application volume, was up 3 percent compared to the previous report.
The Mortgage Bankers Association derives the index from its
Weekly Mortgage Applications Survey, which was reported Wednesday.
MBA said that applications for refinances fell 3 percent from the week ended Nov. 16. Refinance share was cut to 58.2 percent from 61.9 percent a week earlier and 58.7 percent a year earlier.
“Refinance volume dropped further over the week, particularly for refinances of FHA and VA loans,” MBAÂ Chief Economist Michael Fratantoni said in the report.
On purchase financing, applications accelerated
19 percent from the previous report on a seasonally adjusted basis. Without seasonal adjustments, purchase activity jumped 13 percent and was 11 percent more than in the week ended Nov. 20, 2015.
Frantantoni explained, “The increase in purchase activity was driven by borrowers seeking larger loans and that drove up the average loan amount on home purchase applications to $310,000, the highest in the survey, which dates back to 1990.”
At 11.7 percent, applications for loans insured by the Federal Housing Administration accounted for less of the total than the prior week, when FHA share was 12.2 percent. FHA share also thinned from 13.7 percent a year prior.
The share of overall applications that were for mortgages guaranteed by the Department of Veterans Affairs
was trimmed to 12.5 percent from 12.6 percent. But VA share widened from 11.0 percent the same week in 2015.
Frantantoni noted that interest rates on residential loans
have continued to move higher since the election as international investors anticipate increased growth and inflation. He said 30-year rates reached the highest weekly average since the beginning of this year.
Interest rates on
jumbo mortgages were 12 basis points less than conforming rates, widening from a negative 6 BPS seven days earlier. The jumbo-conforming spread thinned, though, from 15 BPS twelve months earlier.
Applications for adjustable-rate mortgages accounted for 5.2 percent of total activity. ARM share widened from 4.7 percent in the last report
but fell short of 6.4 percent in the year-earlier report.
