Mortgage rates broke another set of records during the week ended February 3, establishing several new historic lows.  In response, the seasonally adjusted Mortgage Bankers Association's (MBA) Market Composite Index, a measure of mortgage application volume, rose 7.5 percent and 8.7 percent on an unadjusted basis.    

The increases were driven solely by refinancing which represented 80.5 percent of total applications for the week, up from 80.0 percent the previous week.  The Index measuring applications for refinancing increased 9.4 percent over that of the week ended January 27 but the seasonally adjusted basis the Purchase Index ticked up only 0.1 percent. The unadjusted Purchase Index was 6 percent higher than in the previous week and 4.1 percent lower than during the same week in 2011. 

The four-week moving averages for the seasonally adjusted Market and Purchase Indices were up 4.88 percent and 0.65 percent respectively and the moving average for the Refinance Index rose 5.72 percent. 

Statistics for the month of January indicate that investors played a slightly smaller part in the purchase mortgage market than in December with the investor share of applications for home purchase at 6.4 percent compared to 6.9 percent in December.  In addition, the share of purchase mortgages for second homes increased to 5.9 percent in January from 5.4 percent in December.  The investor share of applications declined in the West and East North Central regions. 

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Both the average contract interest rate and the effective rate for all types of mortgages with loan-to-value ratios of 80 percent declined for the week and all fixed-rate mortgages (FRM) reached new lows. 

  • Rates for 30-year FRM with onforming loan balances of $417,500 or less decreased to 4.05 percent from 4.09 percent, with points increasing to 0.44 from 0.41 including the origination fee. 
  • Jumbo 30-year FRM, those with loan balances greater than $417,500, had averages rates of 4.29 percent with .43 point compared to 4.33 percent with 0.41 point.
  • The rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.89 percent from 3.96 percent, with points increasing to 0.78 from 0.61. 
  • Fifteen-year FRM had an average rate of 3.33 percent, down 3 basis points from the previous week and points decreased to 0.37 from 0.41. 
  • The rate for 5/1 adjustable-rate mortgages (ARM) decreased to 2.91 percent from 2.94 percent, with points increasing to 0.40 from 0.39. The ARM share of mortgage applications was up to 6.0 percent from 5.6 percent the previous week.

MBA's Weekly Mortgage Applications Survey covers 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.