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Application Volume at 19 Month Low as Rates Soar
ThernMortgage Bankers Association (MBA) said rising interest rates causedrnmortgage application activity to fall for the second straight timernweek during the period ended June 21. The Association’s MarketrnComposite Index, a measure of application volume, decreased 3.0rnpercent on a seasonally adjusted basis to its lowest level sincernNovember 2011. The Composite also fell 3.0 percent on an unadjustedrnbasis. </p
ThernRefinance Index was down 5 percent from the week ended June 14 alsornto its lowest point since November 2011 and constituted a 67 percentrnshare of application activity, the lowest share since July 2011,rncompared to 69 percent the previous week. Thirtyrnpercent of refinancing applications were for the HomernAffordable Refinance Program (HARP), down one percent from the weekrnbefore.</p
Refinance Index vs 30 Yr Fixed</p
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Thernseasonally adjusted Purchase Index was up 2 percentage points fromrnthe previous week. The unadjusted Purchase Index rose 1 percentrnweek-over-week and was 16 percent higher than one year earlier. Therngovernment share of purchase applications dropped to 28 percent, thernlowest level in the history of this series. </p
Purchase Index vs 30 Yr Fixed</b</p
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“Interestrnrates moved up sharply following the Federal Reserve press conferencernlast Wednesday where it was indicated that the Fed could beginrntapering their asset purchases later this year,” said MikernFratantoni, MBA’s Vice President of Research and Economics.rn”Mortgage rates increased by the most in a single week since 2011,rnand refinance application volume dropped to its lowest level inrnalmost two years. However, applications for conventional purchasernloans picked up by more than 3 percent over the week, and totalrnpurchase applications were 16 percent higher than one year ago,rnindicating that homebuyers are not yet dissuaded by the increase inrnmortgage rates. Government purchase applications dropped again,rnlikely a function of the recent increase in FHA mortgage insurancernpremiums.”</p
Bothrncontract interest rates and effective rates rose across the boardrnduring the week for loans with an 80 percent loan to value ratio. Points quoted include the origination fee.</p
Thernaverage contract rate for 30-year fixed-rate mortgages (FRM) withrnconforming loan balances of $417,500 or less increased to 4.46rnpercent, the highest rate since August 2011, from 4.17 percent. Points decreased to 0.35 from 0.41. The jumbo version of the 30-yearrnFRM (loan balances over $417,500) increased from 4.23 percent withrn0.34 point to 4.52 percent with 0.28 point. This was the highestrnrate for the jumbo loan since March 2012. The rate for a 30-year FRMrnbacked by FHA soared to its highest rate since August 2011, 4.20rnpercent with 0.40 point, compared to 3.85 percent with 0.22 point thernprevious week. </p
Fifteen-yearrnFRM jumped to the highest rate since November 2011, jumping 25 basisrnpoints to 3.55 percent. Points increased to 0.43 from 0.39. </p
Thernaverage contract interest rate for 5/1 adjustable rate mortgagesrn(ARMs) increased to 3.06 percent, the highest rate since Octoberrn2011, from 2.81 percent,<bwithrnpoints increasing to 0.39 from 0.35. The ARM share of activityrnincreased to 7 percent of total applications.</p
MBA’srnWeekly Mortgage Application survey, conducted since 1990, covers overrn75 percent of all U.S. retail residential mortgage applications.rnRespondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.
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Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.
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