According to the data released from the Mortgage Bankers Association Weekly Mortgage Applications Survey for the week ending November 2, 2018, the mortgage applications reduced 4.0 percent from a previous week.
The Market Composite Index, which is a gauge of mortgage loan application volume, reduced 4.0 percent on a seasonally regulated basis from one week earlier to the lowest point since December 2014. When checked on a basis not adjusted, the Index diminished two percent in comparison with the last week. On the other hand, the Refinance Index declined three percent from the preceding week. The seasonally adjusted Purchase Index reduced five percent from one week previously to the lowest point since November 2016. Based on a comparison with the previous week, the unadjusted Purchase Index cut one percent and was 0.2 percent lesser than the same week last year.
According to Joel Kan, MBA’s associate vice president of economic and industry forecasts, he said there was a slight increase of rates in the previous week, as several job market indicators revealed a quickening in wage growth and leap in job gains in October. He also confirmed that the MBA’s survey 30-year fixed rate placed at 5.15 percent was the peak since April 2010. The application activity dwindled over the week for the refinance and purchase applications, as the entire market index came down to its lowest point since November 2016, but lingered only somewhat beneath the same week a year ago. There is no doubt that the housing inventory shortages have continuously had its effects on the potential homebuyers this fall.
On the other hand, the activity of the refinance mortgage share has reduced to 39.1 percent of the entire applications from 39.4 percent the last week. The share of activity of the adjustable-rate mortgage (ARM) boosted to 7.8 percent of overall applications.
In the previous week, the FHA share of the overall applications diminished to 10.1 percent from 10.3 percent. However, the VA share of the entire applications improved from 9.8 percent to 10.1 percent in the previous week while the USDA share of the total applications maintained its position at 0.7 percent in the last week.
There is an increase in the average contract interest rate for 30-year fixed-rate mortgages with compliant loan balances of ($453,100 or less) from 5.11 percent to 5.15 percent, with an increment of points from 0.50 to 0.51, (not excluding the origination charges) for the 80 percent loan-to-value ratio (LTV) loans. There is an increase in the effective rate from the previous week.
There is an increase in the average contract interest rate for 30-year fixed-rate mortgages with more significant loan balances ranging above $453,100 from 4.94 percent to 4.97 percent, as there is a reduction in the points from 0.28 to 0.27 (in addition to the origination fee) for 80 percent LTV loans. There is an increment of the effective rate from the preceding week.
On the other hand, the average contract interest rate for 30-year fixed-rate mortgages supported by the FHA was boosted from 5.08 percent to 5.15 percent, as points rose from 0.62 to 0.64 (plus with the origination fee) for 80 percent LTV loans. It is on record that the effective rate grew from the previous week.
However, the average contract interest rate for 15-year fixed-rate mortgages remained stable at 4.55 percent, as well as the points at 0.51 (in addition to the origination fee) for 80 percent LTV loans. Like other factors, the effective rate also swelled from the preceding week.
There is an increase of the average contract interest rate for 5/1 ARMs from 4.33 percent to 4.36 percent, and the points reducing from 0.42 to 0.35 plus the origination fee for 80 percent loan-to-value (LTV) loans. The effective rate has not been altered from the previous week.
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