Mortgage Apps Level Off, as Building Permits Rise
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Mortgage Apps Level Off, as Building Permits Rise

September 19, 2019
Photo credit: Getty Images/LOUOATES
Mortgage applications decreased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Sept. 13, 2019. Last week’s results included an adjustment for the Labor Day holiday.
 
The Market Composite Index, a measure of mortgage loan application volume, decreased 0.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 10 percent compared with the previous week. The Refinance Index decreased four percent from the previous week and was 148 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased six percent from one week earlier. The unadjusted Purchase Index increased 16 percent, compared with the previous week and was 15 percent higher than the same week one year ago.
 
“The jump in U.S. Treasury rates at the end of last week caused mortgage rates to increase across the board, with the 30-year fixed-rate mortgage climbing to 4.01 percent–the highest in seven weeks,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Refinancing activity dropped as a result, driven solely by conventional refinances.”
 
The refinance share of mortgage activity decreased to 57.9 percent of total applications from 60.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.0 percent of total applications.
 
The FHA share of total applications increased to 10.9 percent from 9.3 percent the week prior. The VA share of total applications increased to 12.7 percent from 11.9 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.
 
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.01 percent from 3.82 percent, with points decreasing to 0.37 from 0.44 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
 
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) increased to 4.01 percent from 3.84 percent, with points decreasing to 0.29 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
 
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.89 percent from 3.76 percent, with points decreasing to 0.30 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
 
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.42 percent from 3.28 percent, with points decreasing to 0.36 from 0.47 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
 
The average contract interest rate for 5/1 ARMs increased to 3.54 percent from 3.42 percent, with points decreasing to 0.29 from 0.48 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
 
The U.S. Department of Housing & Urban Development (HUD) and the U.S. Census Bureau also announced the new residential construction statistics for the month of August, which found that privately-owned housing units authorized by building permits were at a seasonally adjusted annual rate of 1,419,000. This is 7.7 percent (±1.2 percent) above the revised July rate of 1,317,000 and is 12.0 percent (±1.6 percent) above the August 2018 rate of 1,267,000. Single‐family authorizations in August were at a rate of 866,000; this is 4.5 percent (±0.8 percent) above the revised July figure of 829,000.  Authorizations of units in buildings with five units or more were at a rate of 509,000 in August.
 
Privately owned housing starts in August were at a seasonally adjusted annual rate of 1,364,000. This is 12.3 percent (±10.2 percent) above the revised July estimate of 1,215,000, but is 6.6 percent (±11.6 percent) above the August 2018 rate of 1,279,000. Single‐family housing starts in August were at a rate of 919,000; this is 4.4 percent (±10.3 percent) above the revised July figure of 880,000. The August rate for units in buildings with five units or more was 424,000.
 
Privately‐owned housing completions in August were at a seasonally adjusted annual rate of 1,294,000. This is 2.4 percent (±11.5 percent) above the revised July estimate of 1,264,000 and is 5.0 percent (±11.2 percent) above the August 2018 rate of 1,232,000. Single‐family housing completions in August were at a rate of 945,000; this is 3.7 percent (±10.5 percent) above the revised July rate of 911,000. The August rate for units in buildings with five units or more was 338,000.
 
“Low mortgage rates and the strong job market convinced homebuilders to ramp up production in August. Housing starts surged to the fastest pace since 2007, as both single-family and multifamily segments saw sizable gains. Even more noteworthy was the fact that single-family starts saw their strongest month since January," said Kan. "The strength in new residential construction is consistent with results from our Builder Application Survey released yesterday, which showed similar growth over the past couple of months. Permits for new single-family construction increased for the fourth straight month, which is positive sign for prospective homebuyers and the housing market.”  

 
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