The Mortgage Bankers Association (MBA) is playing catch-up this morning
after a two week holiday hiatus for its Weekly Mortgage Applications
Survey. This always gets a little
confusing; we will see if we can sort it out.
The results are both for the week ended January 1, 2016 which MBA says
include an adjustment to account for the New Year’s Day holiday and for the
week before than which were adjusted for the Christmas holiday. The results
overall reflect changes from the last published report which was for the week
ended December 18.
MBA’s Market Composite Index, a measure of mortgage volume, was down 27
percent from the week ended December 18 on a seasonally adjusted basis. On an unadjusted basis the Index was 50
The Refinancing Index declined 37 percent from the week of the previous
report and the seasonally adjusted Purchase Index was down 15 percent. Unadjusted that index declined 40 percent
from two weeks earlier and was 22 percent higher than during the same period a
Refinance Index vs 30 Yr Fixed
Purchase Index vs 30 Yr Fixed
MBA then explains that that “compositional and rate measures are
presented relative to the previous week only.”
That would include the share of total activity that went to refinancing –
55.4 percent in the most recent week compared to 56.1 percent the week before
and 62.9 percent in the last published report.
mortgages (ARM) had a 4.7 percent share of total applications. No reference was
given for the previous week, but our records show the ARM share was 6.1 percent
during the week ended December 18.
The FHA share of total applications
increased to 14.6 percent from 13.8 percent the previous week and the VA share
was up to 12.9 percent compared to 11.6 percent. The USDA share of total applications remained
unchanged at 0.6 percent.
The average contract interest rate for
30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or
less) increased to 4.20 percent, its highest level since July 2015, from 4.19
percent, with points decreasing to 0.42 from 0.49. The effective rate decreased.
Jumbo 30-year FRM (loan balances greater
than $417,000) had an average contract interest rate of 4.09 percent compared
to 4.07 percent. Points increased to
0.35 from 0.34 and the effective rate was also higher.
Thirty-year FRM backed by FHA had a
slightly lower interest rate, 3.95 percent compared to 3.97 percent the
previous period. Points increased to
0.41 from 0.34 leaving the effective rate unchanged.
The largest change in contract rates among
fixed rate mortgages was for the 15-year which rose 5 basis points to 3.47
along with a 2 basis point increase in points.
The effective rate also increased.
The average contract interest rate for 5/1
ARMs increased to 3.19 percent from 3.13 percent but points dropped to 0.32
from 0.52 lowering the effective rate.
MBA’s survey covers, which has been
conducted since 1990, over 75 percent of all U.S. retail residential mortgage
applications. Respondents include
mortgage bankers, commercial banks and thrifts. Base period and value for all
indexes is March 16, 1990=100 and
interest rate data presumes a loan with an 80 percent loan to value ratio and
points that include the origination fee.