Mortgage Apps Rise Modestly on Lower Rates

There was a slight increase in mortgage application volume during thernweek ended December 19 as interest rates for the most commonly originated mortgagesrncontinued to inch down.  It was the lastrnfull business week of the year and the last time this year the Mortgage BankersrnAssociation (MBA) will report application data. rn </p

MBA said its Market Composite Index, a measure of application volume,rnincreased 0.9 percent during the week on a seasonally adjusted basis.  On an unadjusted basis the composite was 0.4rnpercent higher than during the week ended December 12.  </p

Both the Refinancing Index and the seasonally adjusted Purchase Indexrnwere 1 percent higher than the prior week. rnThe unadjusted Purchase Index was down 1.0 percent compared to both thernprevious week and the same week in 2013. rn</p

Refinance Index vs 30 Yr Fixed</p

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Purchase Index vs 30 Yr Fixed</p

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Refinancingrnwas also up slightly as a percentage of mortgage activity, constituting 67rnpercent of all applications compared to 66 percent the previous week.  Applications for the variousrngovernment-backed loans lost a bit of market share; FHA applications decreasedrnfrom 8.7 to 8.6 percent and VA applications were down from 10.6 percent to 10.3rnpercent.  Applications for USDA mortgagesrnwere unchanged at 0.8 percent. </p

The average contract interest rate for<b30-year fixed-rate mortgages (FRM) with conforming loan balances of $417,000 or lessrndropped by 4 basis points to 4.02 percent, the lowest level since May 2013.  Points increased to 0.26 from 0.21 and therneffective rate decreased from the previous week.</p

The average contract interest rate for 30-yearrnfixed-rate mortgages backed by the FHA decreased to 3.81 percent from 3.86 percent,rnwith points increasingrnto 0.00 from -0.04.  The effective rate decreased.</p

Fifteen year FRM had an average rate ofrn3.29 percent, down from 3.33 percent week-over-week.  Points increased from 0.27 to 0.29 but therneffective rate still declined from a week earlier. </p

Both the jumbo 30-year FRM and the hybridrn5/1 adjustable rate mortgage (ARM) saw contract and effective rate increasesrnduring the week.  Loans with balancesrnover $417,000 had an average contract rate of 4.07 percent with 0.23 pointsrncompared to 3.99 percent with 0.28 percent. rnThe ARM increased to 3.10 percent from 3.00 percent, with points falling to 0.31 from 0.43.  Adjustable rate mortgages of various typesrnreceived 6.5 percent of applications, up from 6.2 percent the previous week. </p

Mortgage application and interest raterndata is compiled from MBA’s Weekly Mortgage Application Survey which covers over 75 percentrnof all U.S. retail residential mortgage applications.  Respondents to the survey, which has been conducted since 1990,rninclude mortgage bankers,rncommercial banks and thrifts. Base period and value for all indexes isrnMarch 16, 1990=100.  Interest rate information is based on loansrnwith an 80 percent loan-to-value ratio and points include the origination fee.</p

MBA will resume its weekly volume reportrnon January 7, 2015.  That report willrninclude data for the weeks ended December 26 and January 2.

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