The volume of mortgage applications declined 2.5 percent for the week ending Sept. 11, 2020, according to the Mortgage Bankers Association’s (MBA) weekly survey. The data included an adjustment for the Labor Day holiday.
On an unadjusted basis, the market composite index, which measures mortgage loan application volume, decreased 13 percent compared to the previous week. The refinance index declined 4 percent from the previous week, but increased 30 percent year-over-year.
The seasonally adjusted purchase index decreased 1 percent from the week before while the unadjusted purchase index dropped 12 percent from the week prior and rose 6 percent year-over-year.
“Mortgage rates held steady last week, and the 30-year fixed-rate — at 3.07 percent — has now stayed near the 3 percent mark for the past two months,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “A 5 percent decline in conventional refinances pulled the overall index lower, but activity was still 30 percent higher than last year. With the flurry of refinance activity reported over the past several months, demand may be slowing as remaining borrowers in the market potentially wait for another sizeable drop in rates.”
Refinance activity decreased from 63.1 percent of total loan applications the week before to 62.8 percent. Meanwhile, the adjustable-rate mortgage (ARM) share of activity increased to 2.3 percent of all applications.
Federal Housing Administration (FHA) applications decreased from 10.2 percent the week before to 9.7 percent. U.S. Department of Veteran’s Affairs (VA) loans rose from 11.2 percent the week prior to 12.3 percent. U.S. Department of Agriculture (USDA) loans declined slightly, however, from 0.6 percent one week ago to 0.5 percent.
On 30-year fixed-rate mortgages with conforming loan balances (balances of $510,400 or less) the average contract interest rate remained constant from the week before at 3.07 percent, with points decreasing from 0.36 to 0.32 for 80 percent loan-to-value ratio (LTV) loans.
For the same type of mortgage with a jumbo loan balance (more than $510,400), the average contract interest rate rose slightly from 3.40 percent the week before to 3.41 percent, with points decreasing from 0.31 to 0.27 for 80 percent LTV loans.
On FHA 30-year fixed-rate mortgages, the average contract interest rate remained the same at 3.16 percent, with points decreasing from 0.42 to 0.35 for 80 percent LTV loans.
On 15-year fixed-rate mortgages, the average contract interest rate declined slightly from 2.62 percent to 2.61 percent, with points increasing from 0.33 to 0.35 for 80 percent LTV loans.
“Applications to buy a home also decreased last week, but the underlying trend remains strong,” Kan added. “Purchase activity has outpaced year-ago levels for 17 consecutive weeks, with a stronger growth in loans with higher balances pushing MBA’s average loan size to a new survey high of $370,200.”