Mortgage Apps Rise Modestly on Lower Rates

There was a slight increase in mortgage application volume during the
week ended December 19 as interest rates for the most commonly originated mortgages
continued to inch down.  It was the last
full business week of the year and the last time this year the Mortgage Bankers
Association (MBA) will report application data. 

MBA said its Market Composite Index, a measure of application volume,
increased 0.9 percent during the week on a seasonally adjusted basis.  On an unadjusted basis the composite was 0.4
percent higher than during the week ended December 12. 

Both the Refinancing Index and the seasonally adjusted Purchase Index
were 1 percent higher than the prior week. 
The unadjusted Purchase Index was down 1.0 percent compared to both the
previous week and the same week in 2013. 

Refinance Index vs 30 Yr Fixed


Purchase Index vs 30 Yr Fixed

was also up slightly as a percentage of mortgage activity, constituting 67
percent of all applications
compared to 66 percent the previous week.  Applications for the various
government-backed loans lost a bit of market share; FHA applications decreased
from 8.7 to 8.6 percent and VA applications were down from 10.6 percent to 10.3
percent.  Applications for USDA mortgages
were unchanged at 0.8 percent.

The average contract interest rate for
30-year fixed
-rate mortgages (FRM) with conforming loan balances of $417,000 or less
dropped by 4 basis points to 4.02 percent, the lowest level since May 2013.  Points increased to 0.26 from 0.21 and the
effective rate decreased from the previous week.

The average contract interest rate for 30-year
fixed-rate mortgages backed by the FHA decreased to 3.81 percent from 3.86 percent,
with points increasing
to 0.00 from -0.04.  The effective rate decreased.

Fifteen year FRM had an average rate of
3.29 percent, down from 3.33 percent week-over-week.  Points increased from 0.27 to 0.29 but the
effective rate still declined from a week earlier.

Both the jumbo 30-year FRM and the hybrid
5/1 adjustable rate mortgage (ARM) saw contract and effective rate increases
during the week.  Loans with balances
over $417,000 had an average contract rate of 4.07 percent with 0.23 points
compared to 3.99 percent with 0.28 percent. 
The ARM increased to 3.10 percent from 3.00 percent, with points falling to 0.31 from 0.43.  Adjustable rate mortgages of various types
received 6.5 percent of applications, up from 6.2 percent the previous week.

Mortgage application and interest rate
data is compiled from MBA’s Weekly Mortgage Application Survey which covers over 75 percent
of all U.S. retail residential mortgage applications.  Respondents to the survey, which has been conducted since 1990,
include mortgage bankers,
commercial banks and thrifts. Base period and value for all indexes is
March 16, 1990=100.  Interest rate information is based on loans
with an 80 percent loan-to-value ratio and points include the origination fee.

MBA will resume its weekly volume report
on January 7, 2015.  That report will
include data for the weeks ended December 26 and January 2.

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