Mortgage applications saw a decline by 2.5 percent on a seasonally adjusted basis, compared to last week, according to the latest Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
"Mortgage rates for all loan types declined last week, with the 30-year fixed mortgage rate falling seven basis points to 4.69 percent - the lowest rate since April 2018," said Joel Kan, AVP of Industry Surveys and Forecasts.
The survey released on Wednesday revealed an increase in the index for mortgage applications by 12 percent on an unadjusted basis, compared with the previous week. The Refinance Index Index increased by 0.3 percent while the Purchase Index decreased 5 percent from the week prior. Data indicated an increase of 13 percent, according to the survey.
The volume of refinance loan applications decreased to 41.6 percent of total applications from 42.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.8 percent of total applications.
"Despite more favorable borrowing costs, and after a three-week surge in activity, purchase applications have slowed over the past two weeks, and are now almost 2 percent lower than a year ago. However, moderating price gains and the strong job market, including evidence of faster wage growth, should help purchase growth going forward. Refinance applications saw a very slight increase compared to the previous week, despite the broad decline in rates, " Kan said.
In government loan applications, the FHA remained unchanged at 10.5 percent. The survey revealed a drop in VA share of total applications at 10 percent this week compared to 10.7 percent last week. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.
Here’s how the average contract interest rates performed for various loans:
- For 30-year fixed-rate mortgages with conforming loan balances decreased to 4.69 percent from 4.76 percent the previous week.
- The rate for 30-year fixed-rate mortgages with jumbo loan balances decreased to 4.50 percent from 4.60 percent.
- FHA-backed 30-year fixed-rate mortgages decreased to 4.70 percent, from 4.77 percent.
- The 15-year fixed-rate mortgages decreased to 4.11 percent from 4.16 percent.
- The rate for 5/1 ARMs decreased to 4.04 percent from 4.14 percent.
The effective rate for all the above loan types recorded a decrease from last week.