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Mortgage Application Volume Hit by Hurricane Sandy
The Mortgage Bankers Association (MBA)rnsaid Hurricane Sandy, the powerful storm that slashed through much of thernnortheast, also impacted mortgage activity last week. MBA’s Market Composite Index, a measure ofrnmortgage application volume, declined 5.0 percent on both a seasonally adjusted and anrnunadjusted basis during the week ended November 2.</p
The Refinance Index and the seasonallyrnadjusted Purchase Index each dropped 5 percent from the week ended October 26rnas well and the unadjusted Purchase Index was down 7 percent from the previousrnweek and was 3 percent lower than during the same week in 2011. This was the fifth straight weekly decline inrnthe Refinance Index which is now at its lowest level since late August althoughrnthe similar slowdown in purchase applications kept the refinancing share ofrntotal activity at 80 percent. Applicationsrnfor the Home Affordable Refinancing Program (HARP) increased from a 25 to a 27rnpercent share of refinancing applications. </p
“Lastrnweek’s storm had a significant impact on application volumes on the EastrnCoast,” said Mike Fratantoni, MBA’s Vice President of Research andrnEconomics. “Applications fell more than 60 percent compared to the priorrnweek in New Jersey, almost 50 percent in New York and nearly 40 percent inrnConnecticut. Other East Coast states also saw declines over the week,rnwhile many states in other parts of the country had increases in applicationrnvolumes.”</p
Purchase Index vs 30 Yr Fixed</b</p
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Refinance Index vs 30 Yr Fixed</p
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Mostrncontract interest rates decreased during the week as did the effective ratesrnfor all but the 15-year fixed-rate mortgage (FRM.) The contract rate for 30-year FRMs withrnconforming balances of $417,500 or less was down 4 basis points from thernprevious week to 3.61 percent with points increasing to 0.45 from 0.39. The rate for jumbo 30-year FRMs withrnbalances over $417,500 fell to 3.88 from 3.94 percent while points remained unchangedrnat 0.36. </p
Thernaverage contract interest rate for 30-year fixed-rate mortgages backed by thernFHA decreased to 3.37 percent from 3.41 percent, with pointsrndecreasing to 0.75 from 0.76</p
Thernaverage contract interest rate for 15-year fixed-rate mortgages remainedrnunchanged at 2.95 percent, with points increasing to 0.40 from 0.35 and, asrnnoted above, the effective rate increased. </p
The marketrnshare of adjustable rate mortgages (ARMs) remained unchanged at 4 percent ofrnapplications. The contract interest raternfor 5/1 ARMs decreased to 2.61 percent from 2.66 percent, withrnpoints increasing to 0.41 from 0.33.</p
Rates arernbased on mortgages with an 80 percent loan-to-value ratio and points includernthe application fee. All volume and raterndata is compiled from MBA’s Weekly Application Survey which has been conductedrnsince 1990. Respondents include mortgagernbankers, commercial banks and thrifts. Base period and value for allrnindexes is March 16, 1990=100.
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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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