Refinancing Increases Market Share as Rates Hit New Lows

by devteam September 26th, 2012 | Share

Refinancing activity increased asrninterest rates fell to new lows according to the Weekly Mortgage ApplicationsrnSurvey released this morning.  The MarketrnComposite Index, a measure of application volume, rose 2.8 percent on arnseasonally adjusted basis and 3 percent unadjusted during the week endedrnSeptember 21.  </p

The Refinancing Index was up 3 percentrnfrom the previous week to the highest level in six weeks and the MortgagernBankers Association which conducts the weekly survey said that the refinancingrnshare of mortgage applications increased to 81.2 percent.  The seasonally adjusted Purchase Indexrnincreased 1 percent from the week ended September 14 and the unadjusted index wasrndown 0.3 percent from a week earlier but was 5 percent above the level duringrnthe same week in 2011.</p

Purchase Index vs 30 Yr Fixed</b</p

ChartManager.loadChart(‘purchaseappschart’, ‘PurchaseMtgAppChart’);


Refinance Index vs 30 Yr Fixed</p

ChartManager.loadChart(‘refiappschart’, ‘RefiMtgAppChart’);


The average contract interest rate for everyrntype of loan tracked by the MBA either established a new survey low or matchedrnone during the week and the effective rate decreased for every fixed raternproduct.  </p

The rate for 30-year fixed-raternmortgages (FRM) with conforming balances of $417,500 or less decreased to 3.63rnpercent from 3.72 percent with points decreasing to 0.41 from 0.45.  The rate for jumbo 30-year FRM (with balancesrngreater than $417,500) dropped 12 basis points to 3.87 percent with pointsrndecreasing to 0.33 from 0.35. </p

Rates for 30-year FRM backed by FHArndecreased to 3.44 percent with 0.41 point from 3.50 percent with 0.57 point.</p

Contract rates for 15-year FRM droppedrnbelow 3 percent, averaging 2.98 percent compared to 3.03 percent the previousrnweek.  Points increased to 0.41 fromrn0.39.</p

The average rate for 5/1 ARMS equaled thernsurvey low established the previous week, 2.61 percent, with points increasingrnto 0.41 from 0.32.  This was the solernproduct for which the effective rate increased. rnFour percent of applications during the week were for adjustable raternmortgages. </p

Interest rates quoted arernfor mortgages with loan to value rations of 80 percent and points include thernapplication fee.</p

MBA’s weekly survey covers over 75 percent of all U.S.rnretail residential mortgage applications, and has been conducted weekly sincern1990.  Respondents include mortgage bankers, commercial banks andrnthrifts.  Base period and value for all indexes is March 16, 1990=100.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of is prohibited.

About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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