Mortgage Applications Fall as Average Rates Rise

by devteam August 8th, 2012 | Share

The volume of mortgage applications bothrnfor purchasing and refinancing declined slightly during the week ended Augustrn3.  The Mortgage Bankers Associationrn(MBA) said this morning that its seasonally adjusted Market Composite Indexrnwhich measures that volume was down 1.8 percent from the level a week earlier  On an unadjusted basis the Index decreased 2rnpercent.</p

After a strong showing for several weeksrnthe Refinance Index fell 2 percent although, with the decline in purchase applicationsrnthose for refinancing maintained the same 81 percent share they held during thernweek ended July 27.  Applications forrnpurchase mortgages slipped 1 percent on a seasonally adjusted basis while thernunadjusted index was down 2 percent compared to the previous week and was 12rnpercent lower than in the same period in 2011.  </p

Purchase Index vs 30 Yr Fixed</b</p

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


Refinance Index vs 30 Yr Fixed</p

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


Interest rates for longer term mortgages rose slightlyrnduring the week.  The average contractrnrate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ofrn$417,500 or less increased to 3.76 percent with 0.46 point from 3.75 percentrnwith 0.51 point but the effective rate of the mortgages decreased from thernprevious week.</p

Jumbo 30-year FRM – loans with balances over $417,500 – hadrnan average rate increase from 4.01 percent with 0.32 point to 4.04 percent withrn0.35 point and the effective rate also increased. </p

FHA-backed 30-year FRM had an average rate of 3.54 percentrncompared to 3.52 percent the previous week with points decreasing to 0.49 fromrn0.55.  The effective rate also increased.</p

The rate for 15-yearrnFRM decreased to 3.08 from 3.09 percent and points were down to 0.41 fromrn0.49.  The effective rate was also down.  </p

The adjustable rate mortgage (ARM) share of applicationrnactivity decreased to 4.0 percent from the previous week when it had a 4.1rnpercent share.  The rate for 5/1 ARMsrndecreased to 2.72 percent from 2.73 percent with points decreasing to 0.40 fromrn0.41 and the effective rate decreased.</p

All rates quoted are for 80 percent loan-to-value ratiornloans and the points include an origination fee.</p

 ThernMarket Composite Index is based on the results of the MBA’s Weekly Mortgage Applicationrnsurvey which has been conducted since 1990. rnThe survey covers over 75 percent of all U.S. retail residentialrnmortgage applications with respondents representing mortgage bankers,rncommercial banks, and thrifts.  Basernperiod and value for all indexes is March 16, 1990=100.

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

About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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