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Mortgage Applications Rebound, Offsets Labor Day Losses

by devteam September 17th, 2014 | Share

The week ended September 12 saw the losses in application volume which occurredrnduring the previous week which was shortened by the Labor Day holiday mostlyrnreversed.  Mortgage application volumernincreased in most categories by nearly the same percentages as they had fallenrnduring the week ended September 5.  </p

The Mortgage Bankers Association said that its Market Composite Index, arnmeasure of mortgage application volume increased 7.9 percent from the previousrnweek’s seasonally adjusted index which had included an adjustment for thernholiday.  On an unadjusted basis thernIndex increased by 19 percent, offsetting the 17 percent decline the previousrnweek.  </p

The Refinance Index increased 10 percent from its level the previous weekrnfollowing an 11 percent decline. rnApplications for refinancing as a percentage of all applicationsrnincreased to 57 percent, the highest level since February, from 55 percent thernprevious week.</p

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

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Applications for home purchases increased 5 percent from a week earlier onrna seasonally adjusted basis while the unadjusted Purchase Index increased 14rnpercent.  The adjusted and unadjustedrnindices had declined by 3 percent and 14 percent the previous week.  The unadjusted Purchase Index was 10 percentrnlower than during the same week in 2013. </p

Refinance Index vs 30 Yr Fixed</p

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Mike Fratantoni, MBA’s Chief Economist suggested that given the holidayrnrelated volatility it would be helpful to look at net change over a two weekrnspan.  “Refinance applications are down 1.4 percent while purchasernapplications are up 2.1 percent,” he said.  “Purchasernvolume continuesrnto track almostrnten percent behindrnlast year’s levels.”rn</p

He pointed outrnthat application volume still managed to rebound after the holiday even asrnmortgage interest rates increased to their highest levels in the last fewrnmonths.  For example, the rate forrn30-year fixed rate mortgages (FRM) with conforming balances of $417,000 or morernincreased by 9 basis points to 4.36 percent, the highest level since June.  Points for that product were down to 0.20rnfrom 0.25 but the effective rate still increased. </p

Rates for jumbo 30-yearrnFRM (loan balances over $417000) also increased by 9 basis points to 4.34rnpercent while points decreased to 0.16 from 0.23.  The effective rate also increased.</p

The averagerncontract interest rate forrn30-year FHA-backed FRM rose to 4.03 percent from 3.97 percent, with points decreasing to 0.05 from 0.08.  Therneffective rate increasedrnfrom the previous week.</p

The largestrnincrease was for the 15-year FRM which jumped from 3.44 percent with 0.28 pointrnto 3.56 percent with 0.25 point.  Therneffective rate was up. </p

The market share ofrnadjustable rate mortgages (ARM) rose slightly from 7.5 to 7.6 percent despite anrnincrease in interest rate of the most popular ARM product, the 5/1 hybrid, Thatrnrate increased to 3.19 percent from 3.12 percent, with points decreasing to 0.29 from 0.45.  The effective rate increased from thernprevious week.</p

MBA’srnapplication information is derived from its Weekly Mortgage Application Surveyrnwhich has been conducted since 1990.  Thernsurvey covers over 75 percent of all U.S. retail mortgage applications andrnrespondents include mortgage bankers,rncommercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100rnand interest rate information assumes a loan with an 80 percent loan-to-valuernratio and points that include the origination fee.

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

About the Author

devteam

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

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