09/11/2019 | Press release | Distributed by Public on 09/11/2019 12:20
In the most recent wave of mortgage activity for the week ending September 6, 2019, the Mortgage Bankers Association's latest Weekly Application Survey showed a continuing decline in interest rates, notably, the 30-year fixed rate mortgage to 3.49% on a non-seasonally adjusted basis. The Market Composite Index, which measures mortgage loan application volume, increased 2% on a seasonally adjusted basis from the prior week. The data strongly support the market's rallying in refinancing and purchase activity, as shown in the below figure, since the end of 2018.
As shown above, average loan size has been climbing since its lowest point in the last ten years, at approximately $194,500 at the end of 2010. Currently, it stands at $337,600. As all of the indexes gauge activities relative to how the market was performing in the first quarter of 1990, the indexes currently indicate refinance activity performing about 24 times as well as it did at that time. Purchase activity about 2.5 times as well as how the market performed during the first quarter of 1990. Despite refinancing activity's dramatic spike this year, particularly in the last month, its share of total mortgage activity is only about 60%, in terms of both dollar volume and number of applications. Recent data point to supply-side constraints, such as the AD&C loan volume contraction, that do not make purchases as appealing in the current economic climate.