More Holiday-Adjusted Volatility for Mortgage Applications

Thernweek ended December 5 was another of those post-holiday periods when mortgagernapplication data skews all over the place just as it did during the holidayrnweek itself.  At the end most figuresrnended up essentially where they were before the festivities began.  </p

ThernMortgage Bankers Association (MBA) said that its Market Composite Index, arnmeasure of mortgage application volume, increased by 7.3 percent on arnseasonally adjusted basis, precisely offsetting the decline in the index thernprevious week which was shortened by the Thanksgiving holiday.  On an unadjusted basis the index rose 52rnpercent, more than overcoming its 37 percent plunge the week before.  </p

The<bRefinance Index increased 13 percent from the previous week and the refinance sharernof applications increased to 64 percent of the total compared to 60 percentrnduring the week ended November 28. </p

Refinance Index vs 30 Yr Fixed</p

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The seasonallyrnadjusted Purchase Index was 1 percent higher than the previous week and thernunadjusted Index was up 37 percent from the holiday week when it fell 32rnpercent. It was 4 percent lower than during the corresponding week in 2013. </p

Purchase Index vs 30 Yr Fixed</p

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Applicationsrnfor various loan types changed only marginally from the previous week.  Applications for FHA-backed mortgages wererndown from 9.3 percent to 9.0 percent of the total; VA applications had a 9.6rnpercent share compared to 9.4 percent and USDA’s market share was unchanged atrn0.8 percent. </p

Thernaverage contract interest rate for 30-year fixed-rate mortgages (FRM) withrnconforming loan balances ($417,000 or less) increased to 4.11 percent from 4.08rnpercent, with points remaining unchanged at 0.28.  The effective rate increased.</p

Thirty-yearrnFRM with jumbo loan balances exceeding $417,000 averaged 4.07 percent with 0.16rnpoint.  The effective rate increased fromrnthe previous week when the contract rate had been 4.11 percent with 0.22 point.</p

Thernaverage contract interest rate for 30-year FRM backed by the FHA increased by 2rnbasis points to 3.87 percent with points decreasing to 0.03 from 0.09.  The effective rate remained unchanged.  </p

Fifteen-yearrnFRM had an average rate of 3.35 percent with .30 point compared to 3.30 percentrnwith 0.25 point the previous week.  Therneffective rate was also higher. </p

Sevenrnpercent of applications during the week were for adjustable-rate mortgagesrn(ARM) compared to 6.7percent the week before. rnThe average contract interest rate for 5/1 ARMs increased to 3.11rnpercent from 3.07 percent, with points decreasing to 0.19 from 0.32.  The effective rate was unchanged week-over-week.  </p

MBA’srnWeekly Mortgage Application Survey which has been conducted since 1990 gathersrnapplication and rate data covering over 75 percent of all U.S. retailrnresidential mortgage applications.  Respondentsrninclude mortgage bankers, commercial banks and thrifts. The base period andrnvalue for all indexes is March 16, 1990=100 and rate information assumes loansrnwith 80 percent loan-to-value ratios.  Pointsrninclude the origination fee.

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