Holiday Adjustments Skew Mortgage Applications

The week ended November 14 was a lackluster one forrnmortgage activity.  Mortgage applicationsrnduring the week, as measured by the Mortgage Bankers Association’s (MBA’s)rnMarket Composite Index increased 4.9 percent on a seasonally adjusted basis butrnon an unadjusted basis applications were down 7 percent.  The higher number included an adjustment tornaccount for the Veterans’ Day holiday which occurred mid-week.</p

Applicationsrnfor refinancing fell from 63 percent of all mortgage applications to a 61rnpercent share.  The Refinance Indexrnincreased 1 percent from the week ended November 7. </p

Refinance Index vs 30 Yr Fixed</p

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Thernseasonally adjusted Purchased index was significantly higher than the previousrnweek, up 12 percent to the highest level since last July.  On an unadjusted basis however the index fellrn3 percent and was 6 percent below its level during the same week in 2013.  </p

Purchase Index vs 30 Yr Fixed</p

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The share ofrnFHA mortgages increased from 9.6 percent to 9.9 percent of all mortgagernapplications and the VA portion rose 5 basis points to 11.5 percent.  Rural Housing Service loans (USDA) accountedrnfor 0.8 percent of application, down from 0.9 percent. </p

Average contract interest rates for mostrnmortgage types mortgages eased very slightly during the week as did thernmajority of effective rates.  </p

Therncontract rate for 30-year fixed-rate mortgages (FRM) with conforming loanrnbalances ($417,000 or less) decreased to 4.18 percent from 4.19 percent andrnpoint were down from 0.26 to 0.24. The rate for 30-year fixed-rate mortgagesrnwith jumbo loan balances (greater than $417,000) decreased to 4.10 percent fromrn4.13 percent, with points increasing to 0.16 from 0.1.  </p

Thirty-yearrnFRM backed by the FHA had an average interest rate of 3.85 percent, down 5rnbasis points from the previous week. rnPoints increased to 0.18 from 0.14. </p

Thernaverage contract interest rate for 15-year fixed-rate mortgages remainedrnunchanged from 3.38 percent, with points increasing to 0.27 from 0.22.  The effective rate increased.  </p

Adjustablernrate mortgage (ARMs) overall had only a 6.9 percent share of applications, downrnfrom 7.1 percent and the lowest share this year.  The average contract interest rate for 5/1rnARMs increased to 3.09 percent with 0.34 point from 3.05 percent, with 0.32rnpoint.  The effective rate increased fromrnthe prior week. </p

MBA derivesrnits data from its Weekly Mortgage Applications Survey which is has conductedrnsince 1990.  The survey covers over 75rnpercent of all U.S. retail residential mortgage applications, and respondentsrninclude mortgage bankers, commercial banks and thrifts. Base period and valuernfor all indexes is March 16, 1990=100.  Mortgage rate information assumes a loan withrnan 80 percent loan to value ratio and points include the origination fee.

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