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Refinancing Resumes in Post Holiday Week, Up 6%
Refinancingrnaccounted for much of the increase in mortgage application activity during thernweek ended November 30 and the share of that refinancing done through the HomernAffordable Refinancing Program (HARP) also increased. Overall mortgage application volume asrnmeasured by the Mortgage Bankers Association’s (MBA) Mortgage Composite Indexrnrose 4.5 percent on a seasonally adjusted basis and the Refinance Index was uprn6 percent.</p
On an unadjusted basis the index increased 49rnpercent from the week ended November 23. rnThat week was shortened by Thanksgiving and the seasonally adjustedrnnumber that week included an adjustment to account for the holiday. The seasonally adjusted Purchase Indexrnincreased 0.1 percent from a week earlier and the unadjusted Index was up 36rnpercent from Thanksgiving week and was 0.1 percent lower than during the samernweek one year earlier.</p
Refinancingrnrepresented an 83 percent share of all applications; up from 81 percent thernprevious week and 27 percent of refinancing applications were for HARP loansrncompared to 26 percent one week earlier. </p
Purchase Index vs 30 Yr Fixed</b</p
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Refinance Index vs 30 Yr Fixed</p
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Mortgagerninterest rates were mixed during the week. rnThe average contract rate for 30-year fixed-rate mortgages (FRM) withrnconventional balances (under $417,500) decreased by one basis point to 3.52rnpercent matching a previous low while points increased from 0.40 to 0.41. The effective rate decreased. The jumbo version of the 30-year FRM (balancesrnabove $417,500) had a slightly higher contract rate than the previous week,rn3.79 percent with 0.32 point compared to 3.75 percent with 0.31 point and therneffective rate increased. </p
The average contract interest rate for 30-year FRM backedrnby the FHA decreased to 3.34 percent, matching the lowest rate in the historyrnof the survey, from 3.36 percent, with points decreasing torn0.62 from 0.65 and the effective rate decreased.</p
Rates for 15-year FRM decreased to 2.86 percent, the lowestrnrate ever tracked by MBA, from 2.89 percent, with points decreasing to 0.27rnfrom 0.35 and the effective rate decreased. </p
Adjustable rate mortgages garnered only a three percentrnshare of mortgage applications during the week, down from 4 percent a weekrnearlier. The average contract interest rate for 5/1 ARMs increased to 2.62rnpercent from 2.60 percent, with points increasing to 0.40 fromrn0.37 and the effective rate increased. </p
Contractrninterest rates are based on loans with an 80 percent loan-to-value ratio andrnpoints include the origination fee. MBA’srnWeekly Mortgage Applications Survey from which this data is derived covers overrn75 percent of all U.S. retail residential mortgage applications, and has beenrnconducted weekly since 1990. Respondents include mortgage bankers,rncommercial banks and thrifts. Base period and value for all indexes isrnMarch 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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