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Mortgage Apps Dive; Rates Spike; FHA/VA now a Quarter of the Market!

by devteam February 18th, 2015 | Share

Mortgage applicationrnvolume fell across the board for the second straight time during the week endedrnFebruary 13, 2015.  The Mortgage BankersrnAssociation (MBA) said its Market Composite Index, a measure of mortgage application volumerndeclined substantially from the previous week, down 13.2 percent on arnseasonally adjusted basis from the week ended February 6 and 12 percent on anrnadjusted basis.</p

All of the Composites components fell compared to the previous week asrnwell.  MBA’s Refinance Index decreased 16rnpercent and the refinance share of applications lost 3 percentage points to 66rnpercent.  The seasonally adjusted PurchasernIndex decreased 7 percent from one week earlier.  The unadjusted PurchasernIndex decreased 2 percent comparedrnwith the previousrnweek but was able to remain 1 percent higher than during the same week in 2014.</p

Refinance Index vs 30 Yr Fixed</p

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Purchase Index vs 30 Yr Fixed</p

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“Mortgage rates increased to their highestrnlevel since the beginning of the year last week, and application volume droppedrnsharply as a result, particularly for refinances. The market index declined to its lowest level since the week ending January 2nd as purchase application activity decreased seven percent and refinancernapplications decreased 16 percent. Refinancernvolume fell particularly for largerrnloans, as evidenced by the decline of almost $25,000rnin the average loan size for a refinance loan,”rnsaid Mike Fratantoni, MBA’s Chief Economist.</p

The FHA share of total applicationsrnincreased to 15.2 percent from 14.1 percent last week and the VA share easedrnback to 8.0 percent from 8.3 percent. The USDA share of total applications increased to 0.9rnpercent from 0.7 percent last week.</p

The average contract interest rate forrn30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 orrnless) increased to 3.93 percent from 3.84 percent, with points increasing torn0.35 from 0.31. The average rate for 30-year fixed-raternmortgages with jumbo loan balances (greater than $417,000) increasedrnto 3.92 percent with 0.28 point from 3.90 percent, with 0.19 point.  The effective rate for both 30-year FRMsrnincreased from the previous week. </p

The average contract interest rate for<b30-year fixed-rate mortgages backed by the FHA increased to 3.73 percent from 3.72 percent,rnwith points decreasing to 0.12 from 0.13.  The effective rate was unchanged.  The average contractrninterest rate for 15-year fixed-raternmortgages increased by 9 basisrnpoints to 3.24 percent.  Points increased to 0.35 from 0.29 and the effectivernrate was also up. </p

The adjustable-rate mortgagern(ARM) share of activity decreasedrnto 5.3 percent of total applicationsrnfrom 5.7 percent .The average contract interest rate for 5/1 ARMs increased torn3.09 percent from 3.07 percent, with points increasingrnto 0.47 from 0.44. The effective rate increasedrnfrom last week.  </p

MBA’s Weekly Mortgage Applications Survey covers over 75 percentrnof all U.S. retail residential mortgage applications;rnrespondents include mortgage bankers,rncommercial banks and thrifts. Base period and value for all indexes isrnMarch 16, 1990=100 and ratesrnpresume an 80 percent loan-to-value ratio and points include the originationrnfee.  The survey has been conducted sincern1990.

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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