Mortgage Apps Eke Out Small Gain

News

The volume of applications increased
slightly during the week ended August 26 as mortgage rates made minor changes and
moved in both directions. The Mortgage Bankers Association (MBA) reported that
its Market Composite Index, a measure of application activity, was 2.8 percent higher
on a seasonally adjusted basis than during the week ended August 19, and rose
2.0 percent unadjusted.

After two weeks of decreasing volume the
Refinancing Index rose 4.0 percent.  The
share of applications for refinancing increased from 62.4 percent the prior
week to 63.5 percent.  It was the fourth
straight week that the share of refinancing increased.

The Purchase Index increased 1 percent on
a seasonally adjusted basis from one week earlier but fell by 1 percent when
unadjusted.  Purchasing applications were
up by 5 percent compared to the same week in 2015.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

The FHA share of total applications
increased to 9.7 percent from 8.9 percent the previous week and the VA share ticked
up to 12.5 percent from 12.4 percent.  USDA
applications retained the 0.6 percent share of applications held a week
earlier.

The average contract interest rate for
30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or
less) was unchanged at 3.67 percent. 
Points dipped to 0.33 from 0.34, lowering the effective rate.

The jumbo version of the 30-year FRM (balances
larger than $417,000) saw a 1 basis point increase in its average contract rate
to 3.63 percent.  Points eased back to 0.27
from 0.35 and the effective rate declined.

There was a slight increase in the
contract rate for FHA-backed 30-year FRM, from 3.53 percent with 0.34 point to
3.54 percent with 0.36 point. The effective rate increased from last week.

The rate for 15-year FRM also gained 1
basis point to an average of 2.96 percent. 
Points however points dropped from 0.38 to 0.31, bringing the effective
rate down.  

The share of applications for adjustable
rate mortgages (ARMs) continues to drift down and was at 4.5 percent last
week.  The average contract interest rate
for 5/1 ARMs increased to 2.90 percent from 2.84 percent, with points
decreasing to 0.24 from 0.37. The effective rate increased from the prior week.

MBA’s Weekly Mortgage Applications Survey covers
over 75 percent of all U.S. retail residential mortgage applications.  It has been conducted since 1990, polling respondents
that include mortgage bankers, commercial banks and thrifts. Base period and
value for all indexes is March 16, 1990=100 and interest rate information is
based on loans with 80 percent loan-to-value ratio and points that include the
origination fee.

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