Mortgage Applications Recover from Holiday Doldrums

by devteam January 16th, 2013 | Share

Applications for mortgages increasedrnsubstantially during the week ended January 11 as purchase applications soared</bto their highest levels in nearly two years. rnThe Mortgage Bankers Association's (MBA)  Market Composite Index for the first fullrnworking week of the New Year increased 15.2 percent on a seasonally adjustedrnbasis and 45 percent on an unadjusted basis compared to the holiday shortened weekrnended January 4.</p

Thernseasonally adjusted Purchase Index was up 13 percent on a seasonally adjustedrnbasis from the previous week to the highest level since April 2011.  The unadjusted index was 47 percent higherrnthan the previous week and 5 percent above that of one year earlier.  The Refinance Index increased 15rnpercent from the previous week and the refinance share of mortgage activityrnremained unchanged at 82 percent of total applications.</p

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

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


Refinance Index vs 30 Yr Fixed</p

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


Interestrnrates for the week were mixed. The average contract rate for 30-year fixed-raternmortgages (FRM) with conforming balances of $417,500 or less remained unchangedrnat 3.61 percent with points decreasing to 0.38 from 0.41.  The effective loan rate decreased from thernprevious week.</p

Jumborn30-year FRM – loans with balances over $417,500 – rose 10 basis points to 3.88rnpercent with points unchanged at 0.38. rnThe effective rate increased.  </p

The averagerncontract rate for 30-year FRM backed by FHA increased to 3.39 percent with 0.58rnpoint from 3.35 percent with 0.69 point and the effective rate increased.  </p

Thernaverage contract interest rate for 15-year fixed-rate mortgages remainedrnunchanged at 2.88 percent, with points decreasing to 0.27 from 0.39 andrnthe effective rate decreased. .</p

The average contract interest rate for 5/1 adjustable raternmortgages (ARMs) increased to 2.66rnpercent from 2.64 percent, with points decreasing to 0.34 fromrn0.37. The effective rate increasedrnfrom last week.   The ARM share of activity increased torn3 percent of total applications.</p

MBA’s Weekly Application Survey covers over 75 percent ofrnall U.S. retail residential mortgage applications, and has been conductedrnweekly since 1990.  Respondents include mortgage bankers, commercial banksrnand thrifts.  Rates are based on loans with an 80 percent loan-to-valuernratio and points include the origination fee. rnBase period and value for all indexes is March 16, 1990=100.rn

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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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