MBA: Mortgage Application Volume Seesawing Wildly

Mortgage application volume has been seesawing wildly during the past several weeks.

After increasing a remarkable 25.5% on an adjusted basis during the week ended Oct. 2, due mainly to lenders accelerating their processing of applications ahead of the Consumer Financial Protection Bureau's new TILA-RESPA Integrated Disclosures rules on Oct. 3, application volume fell 27.6% during the week ended Oct. 9, mainly as a result of the push the week before.

However, during the week ended Oct. 16, application volume bounced back up again, increasing 11.8% compared to the previous week, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

Driving the increase this past week, the MBA says, was a sharp rebound in applications for government-backed loans, including loans backed by the Federal Housing Administration (FHA). Applications for FHA loans increased to 14.3% of all applications, up from 12.6% the week prior. The Veterans Affairs share of total applications increased to 12.7% from 11.5%, and the U.S. Department of Agriculture share increased to 0.6% from 0.5%.

The increase could have been even bigger had the week not included the Columbus Day holiday, which the MBA accounted for in its adjustment of the data.

Interestingly, on an unadjusted basis, total volume increased only 1% compared with the previous week.

Applications for refinances increased 9% while applications for purchases increased 16%.

On an unadjusted basis, applications for purchases increased 5% compared with the previous week and were 9% higher compared with the same week one year ago.

‘We expect that application volume will remain volatile over the next few weeks as the industry continues to implement TILA-RESPA integrated disclosures,’ explains Mike Fratantoni, chief economist for the MBA, in a release.

The refinance share of mortgage activity decreased to 59.5% of total applications from 61.2% the previous week.

Fixed mortgage rates dipped slightly, compared to the previous week. The average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 3.95%, down from 3.99%.

The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 3.87%, down from 3.89%.

The average rate for a 30-year FRM backed by the FHA was 3.78%, down from 3.82%.

The average rate for a 15-year FRM remained unchanged at 3.20%.

The average rate for a 5/1 adjustable-rate mortgage (ARM) was 2.94%, down from 3.00%.

The ARM share of activity decreased to 6.9% of total applications.

All rates are based on closings and the survey covers about 75% of mortgage applications submitted.


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