The weekly mortgage application report from the Mortgage Bankers
Association (MBA) was another recounting of a post-holiday rebound. Last Wednesday's catch up on application activity
during MBA's Christmas/New Year hiatus showed aggregate double digit drops in
all volume categories over the last two weeks of 2015. This week's data, covering the first week of
2016 ending on January 8, shows double digit increases in every category and a
net gain in purchase application volume.
Overall, application volume, which was down 27 percent and 50 percent on a
seasonally adjusted and unadjusted basis respectively during the last weeks of
the year posted increases of 21.3 and 76 percent this past week. Refinancing rose 24 percent after last week's 37 percent decline. Purchase mortgage
applications which had dropped by 15 percent on a seasonally adjusted basis rose
by 18 percent while unadjusted, it soared from -40 to +74 percent. Unadjusted the purchase applications were 19
percent higher than during the same week in 2015.
Refinance Index vs 30 Yr Fixed
Purchase Index vs 30 Yr Fixed
mortgage application index reached its second highest level since May 2010 on a
seasonally adjusted basis last week, second only to the week prior to the
implementation of the Know Before You Owe rules," said Lynn Fisher, MBA's Vice
President of Research and Economics.
strong fourth quarter growth in jobs and continuing low rates, the results are
similar to levels we saw in early December, suggesting that the purchase
market's strong finish to 2015 may be continuing. While refinances also
increased on a holiday-adjusted basis, refinance activity was down 38 percent
relative to a year ago when rates dove below 4 percent," Fisher continued.
The refinance share of mortgage activity
increased to 55.8 percent of total applications from 55.4 percent while the FHA
share decreased to 14.4 percent from 14.6 percent. The VA share was down to 12.2
percent from 12.9 percent. The USDA
share of applications gained 0.2 percentage points to 0.8 percent.
Interest rates, both contract and
effective, retreated from recent highs. The
average contract interest rate for 30-year fixed-rate mortgages (FRM) with
conforming loan balances ($417,000 or less) decreased to 4.12 percent from 4.20
percent. Points decreased to 0.38 from
The rate for 30-year FRM with jumbo loan
balances (greater than $417,000) decreased by 7 basis points to 4.02 percent. Points
declined to 0.30 from 0.35
The average contract interest rate for
30-year FRM backed by the FHA was 3.90 percent with 0.34 point. The previous week's rate was 3.95 percent
with 0.41 point.
15-year FRM rates fell from
3.47 percent to 3.42 percent. Points rose to 0.39 from 0.31.
The adjustable-rate mortgage (ARM) share
of activity increased to 5.1 percent of total applications from 4.7 percent a
week earlier. The average contract
interest rate for 5/1 ARMs fell to 3.14 percent from 3.19 percent, with points
increasing to 0.42 from 0.32.
MBA's Weekly Mortgage Applications Survey
which has been conducted since 1990 covers over 75 percent of all U.S. retail residential
mortgage applications. Respondents include mortgage bankers, commercial banks
and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate information
is based on loans with an 80 percent loan-to-value ratio and points that
include the origination fee.