Mortgage Applications Lowest Since 2000


Mortgage applications displayed their worst
volumes in months during the week ended September 5.  That the week was shortened by the Labor Day
holiday accounted for some of the bright red results, but even after
adjustments to account for the holiday the application numbers were way down.

The Mortgage Bankers Association said
that its Market Composite Index, a measure of mortgage application volume, was
down 7.2 percent on a seasonally adjusted basis to the lowest level since December
.  It was also the largest one week
drop in the index since the week ended June 13. 
On an unadjusted basis the Composite lost 17 percent compared to the
week ended August 29.

The Refinance Index decreased by 11
percent from the previous week, also the largest drop in a single week since
June 13 and falling to the lowest level since November 2008.  The share of refinance applications fell back
to 55 percent from 57 percent.

Purchase Index vs 30 Yr Fixed

The seasonally adjusted Purchase Index
was down 3 percent from one week earlier, reaching the lowest level since last
February.  The unadjusted Purchase Index
was 14 percent lower week-over-week and was down 12 percent from the same week
in 2013.

Refinance Index vs 30 Yr Fixed

With the exception of the benchmark
30-year fixed-rate conforming mortgage (FRM) both average contract and
effective rates decreased during the week. 
The rate for the 30-year FRM with conforming balances of $417,000 or
less increased for the first time in four weeks, rising from 4.25 percent with
0.24 point to 4.27 percent with 0.25 point. 
The effective rate also increased.

Jumbo 30-year FRM (balances greater than
$417,000) fell from 4.22 percent to 4.15 percent.  Points increased to 0.23 from 0.29 and the effective
rate decreased from the previous week.

The 30-year FRM guaranteed by the
Federal Housing Administration (FHA) had an average rate 2 basis points below
that of the previous week at 3.97 percent with points increasing to 0.08 from
003.  The effective rate decreased.

The rate for a 15-year FRM decreased to
3.44 percent with 0.28 point from 3.48 percent and 0.30 point.  The effective rate was also down.  

The share
of applications for adjustable rate mortgages (ARMs) decreased from 7.8 percent
of all applications to 7.5 percent.  The
average contract interest rate for 5/1 ARMs decreased to 3.12 percent from 3.19
percent, with points remaining unchanged at 0.45 and the effective rate

The MBA’s
data is derived from its Weekly Mortgage Application Survey which it has
conducted since 1990.  The survey covers
75 percent of the retail mortgage market and respondents include mortgage
bankers, commercial banks, and thrifts. 
Base period and value for all volume indexes is March 16, 1990=100 and
interest rate quotes are based on loans with an 80 percent loan to value
ratio.  Points include the origination

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