Mortgage App Surge Levels off as Rates Ebb

The law of physics prevailed last week and mortgage applications, ridingrnhigh for the previous two weeks, returned to earth.  The Mortgage Bankers Association (MBA) saidrnits Market Composite Index, a measure of loan applications volume, was 3.2rnpercent lower during the week ended January 23 than it had been a weekrnearlier.  On an unadjusted basis thernindex was down 12 percent. </p

It was another weekrnin which seasonally adjusted numbers were tweaked to account for a holiday, inrnthis case Martin Luther King Day, but the data was still an abrupt departurernfrom the two full weeks that kicked off 2015. rnDuring the week ended January 16 the seasonally adjusted index rose 14.2rnpercent on top of an increase of 46.7 percent the week before.  The unadjusted indices had been up even morerndramatically, with increases of 17 percent and 119 percent respectively. </p

Applications for refinancing had beenrnespecially strong during the previous two weeks but those too fell, draggingrnthe Refinance Index down by 5 percent while the share of applications thatrnwere for refinancing decreased from 74 percent to 72 percent.  </p

Refinance Index vs 30 Yr Fixed</p

ChartManager.loadChart(‘refiappschart’, ‘RefiMtgAppChart’);

</p

Purchase mortgagernvolume was also down.  The seasonallyrnadjusted Purchase Index, was off by 0.1 percent from the week ended July 16 andrnthe unadjusted Purchase Index decreased by 4 percent and was 1 percent higherrnthan during the same week in 2014.  The seasonally adjusted Government Indexrnrose 9.2 percent to its highestrnlevel since July 2013. </p

Purchase Index vs 30 Yr Fixed</p

ChartManager.loadChart(‘purchaseappschart’, ‘PurchaseMtgAppChart’);

</p

The FHA share of total applicationsrnincreased to 9.1 percent this week from 8.0 percent last week and VA loanrnapplications had a 10.7 percent share, up from 9.4 percent.  USDA’s sharernincreased to 0.7 percent from 0.6 percent.rn</p

The downturn in applications could bernaccounted for in part by an increase in both average contract and effective interestrnrates for all products tracked by MBA. rnThe average contract rate for 30-year fixed-rate mortgages (FRM) withrnconforming balances of $417,000 or less increased to 3.83 percent with 0.26rnpoints from 3.80 percent with 0.29 percent. rnThe jumbo version of the 30-year FRM (mortgage balances above $417,000)rnrose one basis point to 3.87 percent while points increased to 0.33 from 0.23.</p

The rate for 30-year FRM backed by the FHArnincreased to 3.71 percent from 3.66 percent, with points decreasing to 0.07 from 0.15.rn</p

Fifteen-year FRM had an average rate ofrn3.15 percent with 0.28 point. rnThe previous week the rate had averaged 3.10 percent, with 0.29rnpoint. </p

Adjustable rate mortgages (ARM) pulledrnonly a 5.7 percent share of total applications, down from 6.7 percent.  The average contract interest rate for 5/1rnARMs increased to 2.96 percent from 2.87 percent, with points increasing to 0.42 from 0.41</p

MBA derives its rate and volumerninformation from its Weekly Mortgage Applications survey which it has conductedrnsince 1990 among mortgage bankers, commercial banks and thrifts. rnThe survey coversrnover 75 percentrnof all U.S. retail residential mortgage applications.  The base period and value for all indexes isrnMarch 16, 1990=100 and interestrnrate quotes assume a loan with an 80 percent loan-to-value ratio; pointsrninclude the origination fee.  .</p

Note: The MBA made slight adjustments to the past two weeks of data as follows: “Due to a revisedrndata submission, results for week ending January 9, 2015 and January 16, 2015 were amended. The seasonally adjusted marketrnindex for week ending January 9, 2015 increased 46.7 percent rather than as initiallyrnreported at 49.1 percent. The seasonally adjustedrnpurchase index increasedrn21.2 percent rather than asrninitially reported at 23.6 percent. The refinance index increased 63.9 percent rather thanrnas initially reported at 66.4 percent. The seasonally adjusted market index forrnweek ending January 16, 2015 increased 16.1 percent rather thanrnas initially reported at 14.2 percent. The seasonally adjusted purchase indexrndecreased 0.6 percent rather than as initially reported as decreasing 2.5rnpercent. The refinance index increased 24.2 percent rather than as initiallyrnreported at 22.3 percent.”

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.