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Mortgage Volume down as Rate Rally Cools
Interest rates increased definitivelyrnlast week and mortgage application volumes fell according to data releasedrntoday by the Mortgage Bankers Association (MBA). The Market Composite Index, a measure ofrnapplication volume, fell 4.1 percent on a seasonally adjusted basis during thernweek ended February 14. The index wasrndown 2.0 percent on a non-seasonally adjusted basis. </p
The Refinance Index decreased by 3 percentrnfrom the week ended February 7 and the share of applications that were forrnrefinancing moved down from 62 percent to 61 percent, the lowest level sincernSeptember 2013. </p
Refinance Index vs 30 Yr Fixed</p
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The seasonally adjusted PurchasernIndex also fell, down 6 percent to the lowest point since September 2011. The unadjusted Purchase Index decreased 2rnpercent from the prior week and was 17 percent lower than during the same weekrnin 2013.</p
Purchase Index vs 30 Yr Fixed</b</p
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The average contract interest rate for arn30-year fixed-rate mortgage (FRM) with a conforming balance ($417,000 or less)rnincreased from 4.45 percent with 0.34 point to 4.50 percent with 0.26 point. The effective rate for this and for all otherrnloan products tracked also increased. rnThe jumbo 30-year FRM with balances above $417,000 saw rates increase torn4.45 percent with 0.11 point from 4.40 percent with 0.14 point.rn</p
The 30-year FRM backed by the FederalrnHousing Administration (FHA) had a contract rate that averaged 4.16 percentrncompared to 4.13 percent the previous week. rnPoints increased to 0.14 from 0.10.</p
The average contract rate for 15-yearrnFRM increased by 6 basis points to 3.55 percent. Points rose to 0.33 from 0.25.</p
The share of applications that went tornadjustable rate mortgages (ARMs) rose slightly to 8 percent. The average contract interest rate for the mostrncommon ARM, the five-year hybrid, rose to 3.20 percent from 3.11 percent. Points increased to 0.38 from 0.31.</p
MBA’s data comes from its WeeklyrnMortgage Applications Survey which it has conducted since 1990. Respondents include mortgage bankers,rncommercial banks and thrift and the survey covers 75 percent of retail mortgagernoriginations. Interest rates are quotedrnfor loans with an 80 percent loan to value ratio and points include thernorigination fee. . Base period and valuernfor all indexes is March 16, 1990=100.
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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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