Mortgage Apps: Slower Amid Heightened Rate Sensitivity

February 19, 2020
Bottom Line: Mortgage activity fell modestly in the latest week as the rate on the average 30-year fixed mortgage rose back over 3.75%, a clear trigger "elbow" for refinancing activity. Refi apps led the declines, but purchase activity was also slightly slower. Overall, mortgage activity remains strong for both refis and purchases amid low mortgage rates. That said, we are watching the 3.75% mortgage rate, a clear inflection point for many borrowers. The MBA Mortgage Applications Index FELL by 6.4% during the week ended February 14 to 645.5, sharply above its 13 week average of 566.6 and 76.7% ABOVE its year-ago level. The Purchase Index FELL by 3.4% to 258.4, modestly below its 13 week average of 273.9 but 11.0% ABOVE its year-ago level. The Refinance Index FELL by 8.0% to 2,875. With this decline, refinancing activity is sharply above its 13 week average of 2,278 and 165.1% ABOVE its year-ago level. Contract Mortgage Rates ROSE with the 30-year fixed rate increasing by 5 bps to 3.77% and the 15-year fixed rate increasing by 2 bps to 3.22%.