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Mortgage Applications Slide Overall, but Purchases Increase
The Mortgage Bankers Association’s MarketrnComposite Index, a measure of mortgage application activity, inched down again during the week ended April 4, decreasingrn1.6 percent on a seasonally adjusted basis compared to the week ended March 28. On a non-seasonally adjusted basis the indexrnwas down 1 percent. Applications have been on a losing streak since the last week in February when there was a 9.8 percent jump.</p
Refinancingrnvolume also fell again, with that MBA index decreasing 5 percent to its lowestrnlevel since the end of 2013. Refinancingrnas a share of all application activity dropped to 51 percent from 53 percent, thernlowest portion since July 2009.</p
Refinance Index vs 30 Yr Fixed</p
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One bright spot from MBA’s WeeklyrnMortgage Application Survey was its report on applications for purchase mortgages. These increased by 3.0 percent on arnseasonally adjusted basis from a week earlier and were also up 3 percent on anrnunadjusted basis. The unadjustedrnPurchase Index however was down 14 percent from the same weekrnin 2013.</p
Purchase Index vs 30 Yr Fixed</b</p
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Interest rates werernrelatively flat. The average contract interest rate for 30-yearrnfixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) was unchanged at 4.56 percent, with points increasing to 0.33 from 0.31.rnThe effective rate was unchanged from the previous week. </p
The contract interestrnrate for jumbo 30-year fixed-rate mortgages with loan balancesrnover $417,000 increasedrnto 4.49 percent from 4.46 percent. rnPoints decreased to 0.14 from 0.27 and there was an easing of the effectivernrate. </p
The average contractrninterest rate for 30-year fixed-rate mortgages backed by the FHA was 4.19 percent with 0.16 pointrncompared to 4.21 percent with 0.15 point a week earlier. The effective rate decreased.rn</p
Fifteen-year fixed-rate mortgagesrnretained the previous week’s average rate of 3.62 percent, with points increasing to 0.31 from 0.23. The effective rate increased.</p
The average contractrninterest rate for 5/1 adjustable rate mortgages (ARMs) increasedrnto 3.26 percent from 3.25 percent, with points increasing to 0.5 from 0.38. The effective rate increased. ARMS of all types had an 8 percent market</bshare, essentially the same share the products have held since last November.</p
The MBA’s survey has been conducted sincern1990 among mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100rnand interest rate information is based on loans with an 80 percent loan tornvalue ratio with points including 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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