Mortgage rates moved back down, as did application volume

For the second consecutive week, mortgage application activity unusually moved in the same direction as interest rates, decreasing 2.2% from one week earlier, according to the Mortgage Bankers Association.

"U.S. and China trade anxieties and protests in Hong Kong pulled U.S. Treasuries lower last week, and the 30-year fixed mortgage rate followed the same path, dipping below 4%," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "Rates have stayed in the same narrow range of around 4% since July, so we may be starting to see the expected slowdown in refinancing as the pool of eligible homeowners shrinks."

The MBA's Weekly Mortgage Applications Survey for the week ending Nov. 15 found that the refinance index decreased 8% from the previous week and was 152% higher than the same week one year ago. This week's results include an adjustment for the Veterans Day holiday.

A week ago, although the average for the 30-year conforming fixed-rate mortgage moved above 4%, mortgage application volume increased as well.

The refinance share of mortgage activity decreased to 59.5% of total applications from 61.9% the previous week.

On the other hand, purchase mortgage application activity rose by 7% on a seasonally adjusted basis, and by 8% unadjusted.

"Purchase applications were 7% higher than a year ago, which adds another solid data point to the recent increases in new-home sales and housing starts. There may be signs that housing inventory is starting to meaningfully rise, which will help with affordability and provide more choices for potential homebuyers."

Adjustable-rate mortgage activity decreased to 4.6% from 4.9% of total applications, while the share of Federal Housing Administration-insured loan applications decreased to 13% from 13.1% the week prior.

The share of applications for Veterans Affairs-guaranteed loans increased to 12.9% from 12.7% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.5% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.99% from 4.03%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate decreased 5 basis points to 3.93%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 5 basis points to 3.8%. For 15-year fixed-rate mortgages, the average decreased 3 basis points to 3.4. The average contract interest rate for 5/1 ARMs increased to 3.51% from 3.4%.