Refinancing continued to buoy up mortgage application volume during the
week ended January 22 as interest rates fell back to levels last seen in the
mid-fall of 2015. Purchase mortgage applications
also increased even as an epic blizzard descended on the South and Northeast.
The Mortgage Bankers Association (MBA) reported this week that its Market
Composite Index, a measure of loan application volume, increased 8.8 percent on
a seasonally adjusted basis compared to the week ended January 15. The results include an adjustment to account
for the Martin Luther King holiday which shortened the work week although not
universally. On an unadjusted basis the index was up 0.3 percent.
The Refinance Index gained 11 percent from
the previous week and the refinance share of mortgage activity dipped to 59.0
percent of all mortgage applications from 59.1 percent the previous week.
The seasonally adjusted Purchase Index was
up 5 percent from the previous week. The unadjusted Purchase Index increased
0.4 percent week-over-week and was 22 percent higher than during the same week in
Refinance Index vs 30 Yr Fixed
Purchase Index vs 30 Yr Fixed
The FHA share of total applications dropped
1 point to 12.7 percent and the VA share rose to 11.1 percent from 10.8 percent
a week earlier. The USDA share of total applications remained unchanged at 0.7
Both contract and effective interest rates
dropped during the week. The average contract interest rate for 30-year
fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) fell
to its lowest level since October 2015, 4.02 percent, from 4.06 percent. Points also eased, from 0.41 to 0.40.
Rates for 30-year FRM with jumbo loan
balances (greater than $417,000) went from an average of 3.93 percent to 3.89
percent. Points decreased to 0.25 from 0.31
FHA backed 30-year FRM had a rate of 3.83
percent, down from 3.86 percent the week before. Points rose to 0.38 from 0.36
There was a 1 basis point dip in the
average contract interest rate for 15-year FRM which averaged 3.28 percent for
the week. Points dropped to 0.37 from
The average contract interest rate for 5/1
adjustable rate mortgages (ARMs) fell 11 basis points to 3.09 percent while
points rose to 0.34 from 0.18. There was
a 0.9 point rise in the share of ARM applications, bringing that share to 6.9
percent of all mortgage applications, the highest since mid-October 2015.
MBA's Weekly Mortgage Application Survey,
which covers over 75 percent of all U.S. retail residential mortgage
applications, has been conducted since 1990. Respondents include mortgage
bankers, commercial banks and thrifts. Base period and value for all indexes is
March 16, 1990=100 and interest
rate information assumes mortgages with a loan-to-value ratio of 80 percent and
points that include the origination fee.