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Mortgage Applications Fall Sharply as Rates Rise
Mortgagernapplications fell during the week ended December 14 with both refinancingrnand purchase applications slowing as rates rose. The Mortgage Bankers Associations (MBA)rnMarket Composite Index, a measure of that volume, was down 12.3 percent on arnseasonally adjusted basis from the week ended December 7 and down 13 percentrnunadjusted.</p
ThernRefinancing Index decreased 14 percent from a week earlier to the lowest levelrnsince November 2 and refinancing as a share of all applications decreased fromrn84 percent to 83 percent. Twenty-fivernpercent of refinancing applications were done through the Home AffordablernRefinance Program (HARP). The seasonally adjusted Purchase Index was 5 percentrnlower than the previous week and the unadjusted Purchase Index was down 8rnpercent week-over-week but was 9 percent higher than during the same period inrn2011.</p
“Despite the FederalrnReserve’s announcement last week that it would purchase an additional $45rnbillion in Treasury securities per month as part of its continuing quantitativerneasing effort, rates increased in the second half of the week,” said Mike Fratantoni, MBA’s Vice Presidentrnof Research and Economics. “As a result, refinance applications droppedrnsharply to the lowest level in over a month.”</p
Purchase Index vs 30 Yr Fixed</b</p
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Refinance Index vs 30 Yr Fixed</p
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Rates for the jumbo version of the 30-year FRM fell to thernlowest rate in the history of MBA’s Weekly Applications Survey, 3.73 percentrnwith 0.29 point. The previous week thernrate was 3.77 percent with 0.35 point. rnThe effective rate was also down.</p
The contract interest rate for 30-year fixed-rate mortgagesrnbacked by the FHA increased to 3.34 percent from 3.32 percent, withrnpoints increasing to 0.54 from 0.51rnand the effective rate increased. </p
Another record low was recorded for the contract rate ofrnthe 15-year FRM at 2.83 percent, down 2 basis points. Points were unchanged at 0.26 and therneffective rate was lower. </p
Adjustable raternmortgages (ARMs) continue to draw only a miniscule 3 percent share ofrnapplications. The contract interest rate for 5/1 ARMs decreased to 2.61 percentrnfrom 2.63 percent, with points increasing to 0.36 from 0.34. The effective rate decreased from last week. </p
Rates quoted are averages for mortgages with 80 percentrnloan-to-value ratios and points include the origination fee. MBA’s survey covers over 75 percent of allrnU.S. retail residential mortgage applications, and has been conducted weeklyrnsince 1990. Respondents include mortgage bankers, commercial banks andrnthrifts. Base period and value for all indexes is March 16, 1990=100.</p
MBA’s offices will be closed during the week of December 24rnthrough January 2. Results of its weeklyrnapplication survey will resume on January 3 and will cover the two prior weeks.rn
All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.
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