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Mortgage Purchase Apps not Living up to Historical Standards
Applicationsrnfor mortgage refinancing made up only 58 percent of all mortgage applicationsrnduring the week ended February 21, down 3 percentage points from the previousrnweek and the lowest market share since last September. According to the Mortgage Bankers Associationrn(MBA) its Refinancing Index was 11 percent lower than the week ended Februaryrn14 and almost all other application volume markets fell as well.</p
Refinance Index vs 30 Yr Fixed</p
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MBA’s seasonallyrnadjusted Market Composite Index which measures all application volume was downrn8.5 percent and the unadjusted index fell 7.0 percent compared to the previousrnweek. The seasonally adjusted PurchasernIndex declined 4 percent from the previous week to its lowest level sincern1995. Purchase applications rose arnslight 0.1 percent from a week earlier but were 15 percent below where theyrnwere during the same week in 2013. </p
“Purchase applications were littlernchanged on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup</bin purchase activity,rnand we are not yet seeing it," said Mike Fratantoni, MBA's ChiefrnEconomist.</p
Purchase Index vs 30 Yr Fixed</b</p
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Contract rates for all fixed raternmortgages returned to mid-January levels and effective rates all increased. The average contract rate for 30-yearrnfixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) increased to 4.53 percentrnfrom 4.50 percent, with points increasing to 0.31 from 0.26 </p
The rate for jumbo 30-year FRM (balances greaterrnthan $417,000) increased to 4.47 percent. Points increased to 0.13 from 0.11</p
Average rates forrnthe 30-year Fixed backed by FHA was up one basis point from the previous week torn4.17 percent. Points increased to 0.20rnfrom 0.14. </p
Fifteen-year FRMrnhad an average rate of 3.56 percent with 0.28 point. The previous week the average was 3.55rnpercent with 0.33 point. </p
The average contractrninterest rate for 5/1 adjustable rate mortgages (ARMs) decreasedrnto 3.17 percent from 3.20 percent,rnwith points decreasing to 0.31 from 0.38 and the effective rate decreased. The ARM sharernof the market remained unchanged at 8 percent.rn</p
MBA’srnWeekly Mortgage Application Survey has been conducted since 1990. Respondents include mortgage bankers,rncommercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100. Contract and effective rates are quoted forrnloans with 80 percent loan-to-value ratios and points include the originationrnfee.
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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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