WASHINGTON, D.C. (December 19, 2018) — Mortgage applications decreased 5.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 14, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index decreased 10 percent compared with the previous week and was 2 percent higher than the same week one year ago.

“Despite mortgage rates falling across the board last week to their lowest levels in three months, mortgage applications also declined, as more potential borrowers likely stayed away because of ongoing financial market volatility and economic uncertainty,” Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications decreased almost seven percent over the week and refinances decreased around two percent, led by a larger decline in government refinances compared to conventional refinances.”

Added Kan, “With rates continuing to slide lower, refinance borrowers with larger loan balances seemed more apt to take action. The average loan balance for refinance loans increased to its highest level since September 2017.”

The refinance share of mortgage activity increased to 43.5 percent of total applications, its highest level since February 2018, from 41.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.9 percent of total applications.

The FHA share of total applications decreased to 10.4 percent from 10.8 percent the week prior. The VA share of total applications decreased to 9.9 percent from 10.2 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to its lowest level since September 2018, 4.94 percent, from 4.96 percent, with points decreasing to 0.43 from 0.48 (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 $453,100) decreased to its lowest level since September 2018, 4.74 percent, from 4.80 percent, with points decreasing to 0.26 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to its lowest level since September 2018, 4.95 percent, from 4.97 percent, with points decreasing to 0.51 from 0.55 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to its lowest level since September 2018, 4.37 percent, from 4.41 percent, with points decreasing to 0.37 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to its lowest level since September 2018, 4.17 percent, from 4.24 percent, with points increasing to 0.42 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

WASHINGTON, D.C. (December 13, 2018) — The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for November 2018 shows mortgage applications for new home purchases decreased 11 percent from a year ago. Compared to October 2018, applications declined by 14 percent. This change does not include any adjustment for typical seasonal patterns.

“By our estimates, new home sales fell almost 7 percent in November, and were about 5 percent lower than a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite a still-strong job market and recent declines in mortgage rates, affordability challenges continue to hold back sales activity, as wage growth still lags behind home-price growth. Additionally, recent stock market volatility and some economic uncertainty likely also contributed to the pullback in home sales in November.”

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 627,000 units in November, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for November is a decrease of 6.8 percent from the October pace of 673,000 units. On an unadjusted basis, MBA estimates that there were 45,000 new home sales in November 2018, a decrease of 15.1 percent from 53,000 new home sales in October.

By product type, conventional loans composed 69.7 percent of loan applications, FHA loans composed 17.3 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 12.3 percent. The average loan size of new homes decreased from $331,732 in October to $326,037 in November.

MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.

WASHINGTON, D.C. (December 4, 2018) — Delinquency rates for commercial and multifamily mortgage loans remained low in the third quarter of 2018, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Delinquency Report.

“Commercial and multifamily mortgage delinquency rates are extremely low right now. The delinquency rate for loans held on bank balance sheets set a new series low, and delinquency rates for loans held by life companies or guaranteed by Fannie Mae and Freddie Mac are all below 10 basis points,” said Jamie Woodwell, MBA’s Vice President for Commercial Real Estate Research. “Loans held in commercial mortgage-backed securities (CMBS) have a higher ‘headline’ delinquency rate because of the way the industry reports on those loans. However, when excluding loans in foreclosure or real estate owned (REO) – which are generally omitted from the calculations for the other groups – the CMBS delinquency rate is just 45 basis points, the same level as December 2005.”

MBA’s quarterly analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, CMBS, life insurance companies, Fannie Mae and Freddie Mac. Together, these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.

Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the third quarter (compared to the second quarter) were as follows:

Banks and thrifts (90 or more days delinquent or in non-accrual): 0.48 percent, a decrease of 0.02 percentage points;
Life company portfolios (60 or more days delinquent): 0.04 percent, an increase of 0.01 percentage points;
Fannie Mae (60 or more days delinquent): 0.07 percent, a decrease of 0.03 percentage points;
Freddie Mac (60 or more days delinquent): 0.01 percent (unchanged);
CMBS (30 or more days delinquent or in REO): 3.05 percent, a decrease of 0.47 percentage points.
MBA’s analysis incorporates the measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another.

Construction and development loans are generally not included in the numbers presented here, but are included in many regulatory definitions of ‘commercial real estate’ despite the fact they are often backed by single-family residential development projects, rather than by office buildings, apartment buildings, shopping centers, or other income-producing properties. The FDIC delinquency rates for bank and thrift held mortgages reported here do include loans backed by owner-occupied commercial properties.

Differences between the delinquencies measures are detailed in Appendix A. To view the report, please visit: https://www.mba.org/Documents/Research/3Q18CMFDelinquency.pdf.