PhotoAfter three advances in as many weeks, applications for mortgages have done an about face.

Data from the Mortgage Bankers Association’s weekly survey shows that applications plunged 7.3% in the week ending September 16, which included an adjustment for the Labor Day holiday.

It was even worse for refinance applications, which were down 8% to the lowest level since June, although the refinance share of mortgage activity inched up to 63.1% of total applications from 62.9% the previous week.

The adjustable-rate mortgage (ARM) share of activity decreased to 4.4% of total applications, the FHA share was down 10.2%, the VA share dipped to 11.6% from 12.0%, and the USDA share of total applications was unchanged at 0.7%.

Contract interest rates

  • The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) rose three basis points -- from 3.67% to 3.70% -- its highest level since June 2016, with points increasing to 0.38 from 0.36 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
  • The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) went to 3.69% from 3.64%, with points decreasing to 0.29 from 0.36 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
  • The average contract interest rate for 30-year FRMs backed by the FHA jumped six basis points to 3.56%, with points decreasing to 0.23 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
  • The average contract interest rate for 15-year FRMs moved from 2.97% to 2.99%, with points increasing to 0.35 from 0.34 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
  • The average contract interest rate for 5/1 ARMs shot up nine basis points to 2.96%, with points decreasing to 0.26 from 0.37 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The survey covers over 75% of all U.S. retail residential mortgage applications.


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