After a short burst of increases, mortgage applications have dipped, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
MBA’s Market Composite Index, a measure of mortgage loan application volume, fell by 1.2% week over week on a seasonally adjusted basis, however, MBA notes that on an unadjusted basis, the Index increased 0.4%.
Additionally, the MBA found that the refinance share has decreased, down to 61.6% of total applications from 62.9% the previous week. MBA’s Refinance Index decreased 2% week over week, though the index is still 116% higher than it was a year ago.
"Mortgage applications dipped slightly last week after two weeks of healthy increases, but even with a slight decline, the total pace of applications remains at an elevated level. The purchase market has started 2020 on a strong note, running 8 % higher than the same week a year ago," said Joel Kan, MBA's Associate VP of Economic and Industry Forecasting. "Refinance applications remained near the highest level since October 2019, as the 30-year fixed rate was unchanged at 3.87%, while the 15-year fixed rate decreased to its lowest level since November 2016. Even with more positive developments surrounding the U.S. and China trade negotiations and healthy retail sales data, investors seemed cautious and maintained their demand for safer U.S. Treasuries, which kept yields lower. Our expectation is that rates will stay along this same narrow range."
The MBA’s reports also covered the volumes of government mortgages. The FHA share of total applications decreased to 11.3 % from 12.7 % the week prior. The VA share of total applications increased to 13.8 % from 12.1 % the week prior. The USDA share of total applications remained unchanged from 0.5 % the week prior.