Although mortgage applications turned lower last week, purchase activity has improved on a year-over-year basis. For the fifth consecutive week, the share of government applications has fallen.
New applications for single-family loans suffered a seasonally adjusted 7 percent decline from a week earlier based on the Market Composite Index for the week ended Feb. 16.
Even without considering seasonal factors, the index — a measure of retail residential loan application activity — retreated by 3 percent compared to the week that concluded on Feb. 9.
Data for the index were extracted from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. More than three-quarters of all applications are reportedly covered by the survey.
One factor likely impacting the slowdown was Presidents Day, as mortgage activity tends to fall on the Friday before a holiday. Also playing a role were rising interest rates — with mortgage rates climbing to the highest level since January 2014.
MBA said that applications for refinances were down by 7 percent. Refinance share, meantime, was 44.4 percent — the thinnest share since it was
42.1 percent in the week ended July 7, 2017. The share was 46.5 percent in last week’s report and 46.2 percent during the same week during 2017.
On a week-over-week basis, applications for home purchase loans fell a seasonally adjusted 6 percent. A 1 percent increase, however, was recorded for purchase-money applications when seasonal factors are ignored, while purchase activity has risen 3 percent from the week ended Feb. 17, 2017.
MBA reported that FHA applications represented 9.9 percent of the weekly total. The share thinned from 10.1 percent the prior week and 11.6 percent a year prior.
Also declining was the share of VA applications — to one-tenth from 10.1 percent. VA share was 12.1 percent the same week a year ago.
Including applications for USDA loans, government share was 20.7 percent — down each week since it was 23.2 percent in the week ended Jan. 12.
Applications for adjustable-rate mortgages accounted for 6.4 percent of the latest total, a little more than the 6.3 percent share in the last report. ARM share has been cut, though, from 7.3 percent one year previous.
Interest rates on jumbo mortgages came in 2 basis points lower than conforming rates. The spread was unchanged
from the preceding week but was much less than than 7 BPS twelve months earlier.
