Refinancing Continues Slide; Volume Flat

Applications for purchase mortgages picked up a little steam this weekrneven as application volume overall remained flat.  The Mortgage Bankers Association said thatrnits Market Composite Index, a measure of application volume, was down 1.3rnpercent during the week ended March 6 on a seasonally adjusted basis and thernunadjusted index lost 1 percent compared to the previous week.</p

The seasonally adjusted Purchase Index gained 2.0 percent from the weekrnended February 27 and the unadjusted version was up 3.0 percent.  The unadjusted Purchase Index was also 2.0rnpercent higher than during the same week in 2014.  These gains were offset by a 3 percentrnweek-over-week decline in the Refinance Index. </p

Refinancing activity slipped another 2 percentage points from thernprevious week to a 60 percent share of all applications.  FHA backed mortgages garnered 14.0 percent ofrnapplications, down from 14.6 percent while the VA share increased to 10.8rnpercent from 9.8 percent.  USDArnapplications made up 0.8 percent of the week’s activity, unchanged from thernprevious period.</p

Refinance Index vs 30 Yr Fixed</p

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Purchase Index vs 30 Yr Fixed</p

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The average loan size for purchasernapplications was $294,900.  This was thernhighest amount in the history of MBA’s Weekly Mortgage Application Survey. </p

Average interest rates for all loanrnproducts, both contract and effective, continued their recent increases.  The average contract rate for 30-yearrnfixed-rate mortgages (FRM), that is loans with balances of $417,000 or less,rnincreased from 3.96 percent to 4.01 percent, the highest rate since the weekrnended January 2, 2015.  Points increasedrnfrom 0.30 to 0.39.</p

The rate for jumbo FRM, loans withrnbalances in excess of $417,000, increased from 3.95 percent to 4.02 percent. rnPoints were unchanged at 0.27. </p

FHA-backedrn30-year FRM rates increased 4 basis points to an average of 3.80 percent.  Points dipped slightly to 0.20 from 0.21.</p

The average contract interest rate forrn15-year FRM increased to 3.29 percent, the highest level since the week ending December 26,rn2014, from 3.27 percent.  Points werernunchanged at 0.30. </p

Applications for adjustable rate mortgagesrn(ARMs) increased from a 5.4 percent share the previous week to a 5.6 percentrnshare.  Hybrid 5/1 ARMS saw a 13 basisrnpoint jump in their average contract rate to 3.18 percent while points droppedrnfrom 0.50 to 0.40.   </p

MBA’s Weekly Mortgage Application Survey,rnwhich has been conducted since 1990, covers over 75 percent of all U.S. retail residential mortgage applications.  Respondentsrninclude mortgage bankers,rncommercial banks and thrifts.  Base period and value forrnall indexes is March 16, 1990=100.  Interest rate information is based on loansrnwith an 80 percent loan-to-value ratio and points include the origination fee.

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