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Mortgage Applications Rise Just Slightly from 12 Year Lows
The Mortgage Bankers Association (MBA)rnreleased data on mortgage application volume for the week ending January 3,rn2014 which included summary information for the week ended December 27 when nornreport was issued. Each week includedrnadjustments to account for holidays, Christmas and New Years respectively. </p
MBA’s Market Composite Index increasedrn2.6 percent on a seasonally adjusted basis during the most recent week and 45rnpercent on an unadjusted basis. ThernRefinance Index was up 5 percent for the week ended January 3 after falling 9rnpercent the week before. Refinancing hadrna 63 percent share of the total application volume both weeks.</p
Refinance Index vs 30 Yr Fixed</p
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The seasonally adjusted Purchase Index</brose 2 percent the week of the Christmas holiday and decreased 1 percent thernfollowing week while the unadjusted Purchase Index increased 42 percent duringrnthe most recent period and was 20 percent lower than in the same week in 2012-2013.</p
Purchase Index vs 30 Yr Fixed</b</p
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Rates were largely unchanged over therntwo week period and those given are for the week ended January 3. The average contract interest rate forrn30-year fixed-rate mortgages (FRM) with conforming balances of $417,000 or lessrnremained at 4.72 percent with 0.28 point. rnThe effective rate increased. The jumbo version of the 30-year FRM wasrnalso unchanged at 4.66 percent with points decreasing to 0.12 from 0.27. The effective rate decreased.</p
Thirty-year FRM backed by the FHA had arnrate increase from 4.35 percent to 4.36 percent with points unchanged atrn0.15. The effective rate increased fromrnthe previous week.</p
The contract rate for 15-year FRMrnincreased to 3.77 percent from 3.73 percent. rnPoints decreased to 0.34 from 0.40 and the effective rate increased.</p
Adjustable rate mortgages (ARMs) held an<b8 percent market share both weeks. Therncontract rate of the 5/1 ARM increased to 3.33 percent with 0.44 point fromrn3.31 percent with 0.46 point and the effective rate increased.</p
Information on volume and rates isrnderived from MBA’s Weekly Mortgage Applications Survey which has been conductedrnsince 1990 and covers over 75 percent of all U.S. retail residential mortgagernapplications. Respondents includernmortgage bankers, commercial banks and thrifts. rnBase period and value for all indexes is March 16, 1990. Rates are quoted for loans with an 80 percentrnloan-to-value ratio and points include the origination fee.
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About the Author
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Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.
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