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Rising Rates Sap Mortgage Application Activity
The strong uptick in mortgage applications during the week ended Februaryrn28 faded quickly and the Mortgage Bankers Association (MBA) said today thatrnapplication volume has resumed the downward trajectory that has prevailed sincernlate last fall. According to MBA’s Weekly Mortgage Applications Survey thernMarket Composite Index, a measure of mortgage volume decreased 2.1 percent on arnseasonally adjusted basis from the week before and down 1 percent on an unadjustedrnbasis.</p
The Refinance Index fell 3 percent week-over-week and refinancingrngarnered a 57 percent share of mortgage activity, down from 57.7 the previousrnweek. The refinancing share is off 6rnpercentage points from the level at the beginning of the year and is at thernlowest point since April 2011.</p
Refinance Index vs 30 Yr Fixed</p
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The seasonally adjusted Purchase Index was 1.0 percent lower and thernunadjusted Purchase Index was 1.0 percent higher than in the week endedrnFebruary 28. The unadjusted index was 17rnpercent below that of the same week in 2013. rn</p
Purchase Index vs 30 Yr Fixed</b</p
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Both contract and effective interest rates rose for all mortgage productsrnduring the week. The average contractrnrate for conventional (loan balances under $417,000) 30-year fixed-raternmortgages (FRM) was 4.52 percent with 0.29 point. The previous week the rate was 4.47 percentrnwith 0.28 point. </p
The average rate for the jumbo version of the 30-year FRM (balances inrnexcess of $417,000) was 4.41 percent, an increase of 4 basis points from thernweek before. Points were unchanged atrn0.20.</p
FHA backedrn30-year FRM had an average rate of 4.18 percent with 0.21 point. This was an increase from the prior level ofrn4.13 percent with 0.13 point.</p
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.53 percent from 3.52 percent. rnPoints increased to 0.28 from 0.18. </p
Adjustable raternmortgages (ARMs) had an 8 percent share of mortgage applications which has beenrnessentially unchanged for the last eight weeks. rnThe average contractrninterest rate for 5/1 ARMs increased to 3.18 percent from 3.09 percent, with points decreasing to 0.36 from 0.38. </p
MBA’srnsurvey covers over 75 percentrnof all U.S. retail residential mortgagernapplications, and has been conducted since 1990.rnRespondents include mortgage bankers,rncommercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100rnand interest rates are based on loans with an 80 percent loan-to-valuernratio. Points include the originationrnfee.
All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.
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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