Mortgage Application Volume Reacts to Rising Rates

The on and off refinancing boomlet that has sporadically driven mortgagernapplication volume since the first of the year went missing again during thernweek ended February 6. The Mortgage Bankers Association said that its MarketrnComposite Index, a measure of application volume, retreated from the previousrnweek’s activity as did most of the index components as interest rates rose fromrnnear record lows.</p

The Composite Index was down 9.0 percent on a seasonally adjusted basisrncompared to the week ended January 30 and it lost 7 percent on an unadjustedrnbasis.  The Refinance Index, declined 10rnpercent as the refinancing share of all mortgage applications dropped from 71rnto 69 percent.</p

The seasonally adjusted Purchase Index decreased by 7 percent from a weekrnearlier and the unadjusted index was 1 percent lower than both the previousrnweek and the same week in 2014.</p

Refinance Index vs 30 Yr Fixed</p

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Purchase Index vs 30 Yr Fixed</p

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The FHA share of total applicationsrnincreased from 13.1 percent to 14.1 percent while the VA applications lost 2rnbasis points to take an 8.3 percent share. rnUSDA applications made up 0.7 percent of the total compared to 0.6rnpercent the previous week.  </p

Interest rates as a whole continued to bouncernback off of the spring 2013 levels they had reached in early January.  The average contract interest rate forrn30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000rnor less) increased to 3.84 percent, the highest level since January 9, 2015,rnfrom 3.79 percent.  Points increased to 0.31 from 0.29 and therneffective rate increased.  </p

Jumbo 30-year FRM, loans with balancesrnover $417,000, had an average interest rate of 3.90 percent with 0.19rnpoint.  A week earlier the average raternhad been 3.82 percent with 0.22 point. rnThe effective rate increased as well. rn</p

Interest rates for FHA backed 30-year FRM rosernon average by three basis points to 3.72 percent.  Points increased from 0.07 to 0.13 and the effectivernrate increased. </p

The average contractrninterest rate for 15-year fixed-raternmortgages increased to 3.15 percentrnfrom 3.14 percent, with pointsrndecreasing to 0.29 from 0.31. The effective rate remained unchanged from thernprior week.</p

The share of adjustable rate mortgagern(ARM) applications rose slightly from a 5.3 percent share to 5.7 percent andrnthe average contract interest rate for 5/1 ARMs went from 0.03 percent to 3.07rnpercent.  Points increased to 0.44 fromrn0.39 and the effective rate also rose</p

MBA’s Weekly Mortgage Applications Surveyrnwhich has been conducted since 1990 covers over 75 percent of all U.S. retail residential mortgage applications.  Respondentsrninclude mortgage bankers,rncommercial banks and thrifts. Base period and value for all indexes isrnMarch 16, 1990=100 and interestrnrates information is based on mortgages with an 80 percent loan-to-value ratiornand points include the origination fee.

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