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Lackluster Week for Mortgage Applications
Mortgage Applications slowed for the second straight time last week butrnthe loss was modest compared to the 9.2 percent plunge during the week thatrnpreceded it. The Mortgage BankersrnAssociation’s (MBA) Mortgage Applications Survey found that applications forrnmortgages during the week ended June 20 were 1 percent lower on a seasonallyrnadjusted basis than during the week ended June 13. The loss brought the Market Composite Index, arnmeasure of application volume, down to its lowest level since April. On an unadjusted basis the index was down 2.0rnpercent.</p
The Refinance Index retreated to its May levels, sliding another 1rnpercent. Applications for refinancingrnheld the same 52 percent share of all applications received as during thernprevious week. </p
Refinance Index vs 30 Yr Fixed</p
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The seasonally adjusted Purchase Index lost 1 percent and the unadjustedrnindex was 2 percent lower than the week before. rnThe unadjusted index was 18 percent below its level during the same weekrnin 2013. </p
Purchase Index vs 30 Yr Fixed</b</p
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Both the contract and the effective interest rates for fixed rate loans werernlower than during the previous week. Thernaverage contract interest rate for 30-year fixed-rate mortgages (FRM) withrnconforming balances of $417,000 or less was 4.33 percent with 0.18 pointrncompared to 4.36 percent with 0.24 point. rnThe rate for 30-year jumbo FRM decreased to 4.28 percent from 4.32rnpercent while points increased to 0.12 from 0.09. </p
Rates for FHA-backed 30-year FRM fell by 4 basis points to 4.03 percent. Points declined to -0.38 point from -0.39rnpoint. </p
Fifteen-year</bFRM had an average contract rate of 3.47 percent with 0.19 point. The previous week the rate was 3.50 percentrnwith 0.16 point.</p
Eightrnpercent of the applications received during the period were for adjustable raternmortgages (ARMs). The contract rate forrnthe most popular of those loans, the 5/1 ARM, increased to 3.23 percent fromrn3.20 percent with points unchanged at 0.27. rnThe effective rate also increased. rn</p
MBA’s weekly surveyrncovers over 75 percentrnof all U.S. retail residential mortgagernapplications. Respondents to the survey, which has been conducted sincern1990, include mortgage bankers,rncommercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100rnand interest rates are quoted for loans with an 80 percent loan-to-valuernratio. Points include the originationrnfee.
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About the Author
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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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