Mortgage applications jumped 23.1
percent on a seasonally adjusted basis during the week ended January 13,
2012. The increase in the Market
Composite Index, a measure of loan application volume maintained by the
Mortgage Bankers Association (MBA) reflected improvements in both the purchase
and refinance business following the traditionally slow Christmas and New Year
holiday period. On an unadjusted basis
the index increased 38.1 percent.
The Refinance Index increased 26.4
percent from the week ended January 6 to its highest point since August 8,
2011. The seasonally adjusted Purchase
Index rose 10.3 percent, returning to pre-holiday levels. The unadjusted Purchase Index was up 28.4
percent from the previous week and was 2.2 percent higher than during the same
week in 2011.
The four-week moving average for each
index also increased; the Composite Index increased by 5.99 percent, the
seasonally adjusted Purchase Index by 1.96 percent and the Refinance Index by
Refinancing took an 82.2 percent share
of all application activity, up from 80.8 percent the previous week and the
highest share since October 22, 2010. Applications
for adjustable rate mortgages (ARMs) constituted represented a 5.6 percent
share of applications, up two basis points from the previous week.
Purchase Index vs 30 Yr Fixed
Refinance Index vs 30 Yr Fixed
rates dropped last week due to continuing anxieties regarding the fragile
economic situation in Europe," said Michael Fratantoni, MBA's Vice
President of Research and Economics. "With mortgage rates reaching
new lows, refinance volume jumped and MBA's refinance index reached its highest
level in the last six months. Purchase activity also increased as buyers
returned to the market after the holiday season."
the exception of jumbo loans (with balances over $417,500) interest rates continued
their downward trend. Three of the rates, in fact, hit the lowest level in the
history of the MBA applications survey. The
jumbo rate - for 30-year fixed-rate (FRM) loans - increased to 4.40 percent
from 4.34 percent with points decreasing to 0.37 from 0.47 point. The effective rate also increased.
FRM with conforming (under $417,500) balances hit a new low, decreasing to 4.06
percent with 0.48 point from 4.11 percent with 0.41 point. The effective rate
for FHA guaranteed 30-year FRM were
at 3.91 percent with 0.59 point, the lowest FHA
rate in the history of MBA's application survey, down from 3.96 percent with 0.72 point. The effective rate also decreased from the previous week.
third all-time low is the 3.33 percent rate with 0.39 point for the 15-year FRM.
This was a drop from 3.40 percent with 0.37 point rate the previous week. The effective rate also decreased.
average contract interest rate for 5/1
ARMs was unchanged at the record low 2.90 percent established the previous
week. Points decreased to 0.45 from 0.49. The
effective rate also decreased from last week.
rates quoted are for 80 percent loan-to-value originations and points include
the application fee.
over 75 percent of all U.S. retail residential mortgage applications, and has
been conducted weekly since 1990. Respondents include mortgage bankers,
commercial banks and thrifts. Base period and value for all indexes is
March 16, 1990=100.