After factoring in the Labor Day holiday, the volume of new home loan applications jumped last week. Refinance share, meanwhile, widened to the highest level in eight months.
A measure of retail residential loan application volume, the Market Composite Index, climbed a seasonally adjusted 10 percent during the seven days that ended on Sept. 8.
Mortgage application volume tumbled 13 percent, however, compared to the preceding
week when seasonal factors are excluded from the index calculation.
The index is derived from the Mortgage Bankers Association’s
Weekly Mortgage Applications Survey, which reportedly covers more than three-quarters of all applications.
A 9 percent increase from the week ended Sept. 1 was recorded for refinance applications. At 51.0 percent — refinance share was the widest it’s been since it was 53.0 percent in the week ended Jan. 13. Refinance share was 50.9 percent in last week’s report and 62.9 percent in the same seven days last year.
MBA reported that applications for loans to finance a home purchase
rose a seasonally adjusted 11 percent from the week ended Sept. 1, 2017. But purchase-money business slowed 13 percent from the prior week without seasonal adjustments, though a 7 percent increase was recorded versus a year prior.
The trade group reported that applications for mortgages insured by the Federal Housing Administration represented 9.9 percent of total activity.
FHA share widened from 9.6 percent in the last report and in the same week during 2016.
Another 10.3 percent of applications were for loans guaranteed by the Department of Veterans Affairs. VA share climbed from 9.7 percent in last week’s report
but was much thinner than 12.0 percent the same week a year ago.
At 6.7 percent, the share of applications that were for adjustable-rate mortgages was more narrow than
the previous week’s 7.2 percent. But ARM share was more broad than 4.6 percent in the week ended Sept. 9, 2016.
The report indicated that interest rates on jumbo mortgages were 3 basis points lower than rates on conforming loans. The jumbo-conforming spread was slashed from a negative 10 BPS
in the prior seven-day period but unchanged from the same seven days last year.