Purchase Applications Hit 21-Month High

A healthy increase in purchase mortgage applications last week was metrnwith shrinking refinance activity leaving the Mortgage Bankers Association’srnMarket Composite Index for the week ended April 3 essentially unchanged. ThernComposite, a measure of application volume, increased 0.4 percent on arnseasonally adjusted basis from the previous week and was 1.0 percent higher onrnan unadjusted basis than the Composite for the week ended March 27. </p

The seasonally adjusted Purchase Index and its unadjusted counterpartrnboth increased by 7 percent compared to the previous week and the unadjustedrnindex was 12 percent higher than during the same week in 2014.  According to Michael Fratantoni, MBA’s ChiefrnEconomist, it was the highest level of activity for the seasonally adjustedrnPurchase Index since July 2013 and the third straight week that purchase volumernhad increased.  </p

At the same time the Refinance Index decreased 3 percent and the share ofrnapplications that were for refinancing dropped from 60 percent to 57rnpercent.  It was the lowest market share forrnrefinancing since early October. </p

Refinance Index vs 30 Yr Fixed</p

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Purchase Index vs 30 Yr Fixed</p

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The FHA share of total applicationsrnincreased to 13.2 percent from 12.8 percent the previous week and the VA share rosernto 10.7 percent from 10.5 percent. The USDA portion of the application volumernremained unchanged at 0.8 percent.</p

Both contract and effective mortgage<binterest rates were lower during the week ended April 3 than the previous week.  The average contract interest rate forrn30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000rnor less) decreased 3 basis points to 3.86 percent.  Points decreased to 0.27 from 0.36.</p

Jumbo 30-year FRM (mortgage balancesrngreater than $417,000) had an average contract rate of 3.81 percent, the lowestrnlevel since May 2013, with 0.26 point. rnThe previous week the rate was 3.90 percent with 0.34 point.</p

Thirty-year FRM with FHA guarantees had anrnaverage contract rate of 3.69 percent with 0.18 point.  The prior week the average rate was 3.73rnpercent with 0.13 point. </p

The averagerncontract interest rate for 15-year fixed-rate mortgages decreased to 3.15rnpercent from 3.21 percent.  Points were unchanged at 0.29.  </p

The average contractrninterest rate for 5/1rnadjustable rate mortgages declined by 17 basis points resulting in the lowestrnlevel for these loans since May 2013. rnPoints increased from 0.41 to 0.45. rnThe ARM share of applications during the week decreased from 5.6 to 5.5rnpercent.  </p

MBA’s data is gathered through its WeeklyrnMortgage Application Survey.  The survey coversrnover 75 percent of all U.S. retailrnresidential mortgage applications, and has been conducted since 1990. Respondents includernmortgage bankers, commercial banks and thrifts.  Base period and value for all indexesrnis March 16, 1990=100 and raterninformation.is based on loans with 80 percent loan to value ratios.  Points include the origination fee.

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