Mortgage applications shoot as interest rate falters

Mortgage applications increased 15.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending February 28, 2020. The results for the week ending February 21, 2020, included an adjustment for the Presidents' Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 15.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 29 percent compared with the previous week. The Refinance Index increased 26 percent from the previous week and was 224 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index increased 11 percent compared with the previous week and was 10 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 66.2 percent of total applications from 60.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications.

The FHA share of total applications decreased to 9.3 percent from 10.5 percent the week prior. The VA share of total applications decreased to 10.5 percent from 11.8 percent the week prior. The USDA share of total applications decreased to 0.4 percent from 0.5 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.57 percent from 3.73 percent, with points decreasing to 0.26 from 0.27 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater
than $510,400) remained unchanged at 3.72 percent, with points decreasing to 0.20 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.