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Mortgage Apps: 30-year Rates Hold Over 4%

October 30, 2019

Bottom Line: As the average 30-year fixed-rate held over 4% last week applications for refinancing fell as purchase applications increased slightly. The slowness in refis last week confirms that there appears to be a trigger for refinancing around the 4% rate on 30-year mortgages. Refi activity jumped on the move to 3.875%, confirmed by fast mortgage-backed security prepayment speeds, but slowed sharply on the move back over 4%. On a trend basis refinancing activity is still up sharply since the broad decline in rates started at the end of 2018. Purchase applications are mixed, despite the low overall rate level.

The MBA Mortgage Applications Index ROSE by 0.6% during the week ended October 25 to 519.2, moderately below its 13 week average of 560.6 but 57.6% ABOVE its year ago level.

The Purchase Index ROSE by 2.3% to 247.2, slightly below its 13 week average of 251.6 but 9.9% ABOVE its year ago level.

The Refinance Index FELL by 0.5% to 2,066. With this decline, refinancing activity is sharply below its 13 week average of 2,328 but 133.7% ABOVE its year ago level.

Contract Mortgage Rates ROSE with the 30-year fixed rate increasing by 3 bps to 4.05% and with the 15-year fixed rate increasing by 1 bp to 3.40%.

Article by Contingent Macro Advisors