Applications for purchase-money mortgages accelerated during the holiday week. But a plunge in refinance applications to the lowest level in more than 17 years dragged down overall activity.
A seasonally adjusted 1.8 percent reduction from
the preceding seven-day period was recorded for the Market Composite Index for the week ended Sept. 7. The index is a measure of retail residential loan application volume.
But when seasonal factors are not considered, mortgage applications during the week that included Labor Day plummeted 13 percent from the week ended Aug. 31.
Reporting the index Wednesday was the Mortgage Bankers Association. The Washington-based trade group said it derives the index from its Weekly Mortgage Applications Survey, which it claims covers more than three-quarters of all applications.
MBA said refinance applications tumbled 6 percent from a week earlier to the lowest level since December 2000. Weekly refinance share thinned to 37.8 percent from 38.9 percent and was sliced from 51.0 percent in the same-seven days during 2017.
Unlike refinance activity, applications for loans to finance a home purchase moved up a seasonally adjusted 1 percent. But purchases tumbled 11 percent without the adjustments, though they were up 4 percent from the week ended Sept. 8, 2017.
Applications for mortgages insured by the Federal Housing Administration accounted for 10.4 percent of the week’s total, more than the 10.2 percent share as of the prior week and the 9.9 percent as of a year prior.
Similarly, the share of applications that were for loans guaranteed by the Department of
Veterans Affairs widened to 10.5 percent from 10.0 percent in last week’s report and 10.3 percent a year previous.
Adjustable-rate mortgage share thickened to 6.4 percent from 6.1 percent
but was more narrow than 6.7 percent during the same seven days in 2017.
Finally, MBA’s data indicate that interest rates on jumbo mortgages were 12 basis points better than conforming rates. The spread thinned from 13 BPS the previous week
but was much wider than 3 BPS twelve months earlier.
