MBA: Shutdown Impacted Pending Mortgage Application Volume

Mortgage application volume increased 0.3% for the week ending Oct. 11, on an adjusted basis, compared to the week prior, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey, which covers more than 75% of all U.S. retail residential mortgage applications.

On an unadjusted basis, application volume increased 0.4% compared with the previous week.

Refinancing volume increased 3% from the previous week.

The Purchase Index, which measures pending application volume, decreased 5% from one week earlier, on both a seasonally adjusted and unadjusted basis. It was 1% lower compared to the same week one year ago.

The MBA attributed the drop in pending volume to the government shutdown – more specifically, that the government agencies cannot process loans as quickly as normal, due to the fact that they are operating with reduced staff.

‘The government shutdown had a notable impact on the mortgage market last week,’ says Mike Fratantoni, vice president of research and economics for the MBA, in a statement. ‘Purchase applications for government programs dropped by more than 7 percent over the week to their lowest level since December 2007, and the government share of purchase applications dropped to its lowest level in almost three years. Conventional purchase applications dropped as well, but not to the same extent, falling almost 4 percent for the week.’

The refinance share of mortgage activity increased to 66% of total applications – up from 64% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6% of total applications.

Interest rates more or less held steady, compared to the previous week. The average interest rate for a 30-year fixed-rate mortgage with a conforming loan balance ($417,000 or less) increased to 4.46% from 4.42%. The average interest rate for a 30-year fixed-rate mortgage with a jumbo loan balance (greater than $417,000) increased to 4.51% from 4.45%.

The average interest rate for a 30-year fixed-rate mortgage backed by the Federal Housing Administration increased to 4.16% from 4.15%.

The average interest rate for a 15-year fixed-rate mortgage increased to 3.53% from 3.52%. The average interest rate for a 5/1 ARM remained unchanged at 3.25%.


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