Purchases Up Despite Holiday Slump in Mortgage Apps

After an adjustment made for the Thanksgiving holiday, the Market Composite Index for the week ended Nov 24 was down more than 3 percent from the preceding week.

The decline was far more steep foregoing seasonal factors, with a more than one-third tumble without seasonal adjustments to the index — a measure of retail residential loan application volume.

The Mortgage Bankers Association
provided the index as part of its Weekly Mortgage Applications Survey, which reportedly covers more than three-quarters of all applications.

Refinance applications declined 8 percent from the week ended Nov. 17 as refinance share thinned to 48.7 percent from 49.9 percent a week earlier and
55.1 percent a year earlier.

But purchase financing went another direction — rising a seasonally adjusted 2 percent from the previous report. Without any adjustments, the Purchase Index was down by almost a third, though it was up 6 percent from the week ended Nov. 25, 2016.

Applications for loans insured by the Federal Housing Administration accounted for 10.8 percent of total activity. FHA share widened for the second week in a row from 10.6 percent in the prior seven-day period and 10.4 percent in the same seven days last year.

A week-over-week increase was also recorded for the share of mortgages that are guaranteed by the Department of Veterans Affairs, which widened to 11.0 percent from 10.7 percent in last week’s report. Still, VA share was thinner than 11.7 percent the same week in 2016.

Of all applications that were completed, 6.2 percent were for adjustable-rate mortgages. ARM share was trimmed from 6.5 percent the prior week. But the share was more broad than 5.7 percent in the same week a year ago.

The trade group’s data indicate that jumbo interest rates were 6 basis points lower than conforming rates. The spread fattened from 4 BPS the previous week and
5 BPS a year previous.